Enterprise Singapore to partly fund food delivery fulfilled by logistics players

ENTERPRISE Singapore (ESG) said on Thursday that it will fund part of the costs incurred by food and beverage (F&B) players when they fulfil delivery orders through third-party logistics partners.

The move is an enhancement to the Food Delivery Booster Package rolled out by the government agency on April 4, which initially only partly covered the commission costs for F&B players on delivery platforms Deliveroo, foodpanda and GrabFood.

Under the second phase of the scheme, ESG will fund 20 per cent of the delivery costs for orders fulfilled by logistics players and made between April 7 and May 4. The agency noted that not all F&B businesses are on board food-delivery platforms.

The funding will be disbursed through eligible third-party logistics partners such as Lalamove and Zeek.

This comes after the government ramped up measures to enforce social distancing in response to the Covid-19 outbreak. Till May 4, F&B establishments will no longer be able to accept dine-in customers, dealing a further blow to the sector and pushing many to turn towards food delivery.

In addition, ESG will partly fund an aid package worth more than S$1,500. The package was developed by the agency and the delivery platforms to help businesses optimise their online presence and improve sales as they turn towards food delivery.

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The package covers areas such as developing a pricing structure, tapping marketing channels, and using data to improve delivery performance and business models.

F&B businesses need only pay a one-time fee of S$100 to access the services for a year. The rest of the cost will be borne by ESG and the three delivery players.

Separately, to help businesses respond to the growing trend of online delivery and build digital capabilities for the long term, ESG will support up to 90 per cent of eligible costs through the Enterprise Development Grant.

Eligible costs include digital marketing and manpower costs, and will cover the areas of creating a virtual brand and developing an online-to-offline (O2O) strategy.

ESG noted that virtual brands can be created with lower capital expenditures and risks than when setting up a new brand through a brick-and-mortar format. Virtual brands can also help optimise current capacities in manpower and operations - for instance, through the use of shared kitchens.

A sound O2O strategy can help businesses strengthen customer engagement, said ESG. This can be done through collecting and analysing data on how customers interact with the brand both online and offline.

"In the past year, the industry has seen a strong demand in food deliveries, as a result of changing consumer preferences. Thus, it is increasingly important for F&B businesses to optimise their business models for online sales as well as to build new capabilities to navigate the digital space," said Ted Tan, deputy chief executive of ESG.

"Despite the challenges brought about by COVID-19, businesses can take the opportunity to start building their online presence."