For many, changing the online business in the F&B industry has been necessary since the pandemic hit our shores. Those who could not do so have seen the closing their outlets and entire companies that have been built over the years.
Recognizing these struggles, kEATchen was launched as a cloud kitchen to help vendors navigate food delivery systems. This is especially so for street food street vendors, who mostly get their livelihoods from customers who work at home and eat there.
Preserve local street food
It was founded by a group of 4 eateries who were saddened to see how their street food operators preferred to open shops while struggling to stay afloat. Moved to do something to help, they launched kEATchen in Ara Damansara as a place where these vendors would prepare their dishes and operate on a delivery-only model.
While there are already several brands of cloud cooking around the Klang Valley, including Cookhouse, Kitchen Connect and Grab Kitchen, kEATchen founder Martin Kim isn’t too worried. He believes kEATchen has determined a niche to help street food vendors stay competitive in a digital space while maintaining its authenticity and brand presence.
In addition, from the perspective of F&B companies, kEATchen is another option they can choose from among many to stay operational, especially because each kitchen in the cloud also has its maximum capacity.
Suppliers who want to ship kEATchen consist of street food operators, including street vendors kopitiams. Martin noted that the vendors they want to work with should belong to several criteria, which include having a historical menu related to Malaysia’s unique staple foods and being a family business that has been passed on to the next generation.
From the criteria, it seems that kEATchen aims, above all, to help marketers who have been in the business for a generation, and not those who are starting their own street or street food business.
Blocking traffic from delivery applications
It’s worth noting that kEATchen isn’t the only cloud kitchen that wants to target a market segment of this type of F&B vendor. Air Kopitiam in Cheras it is marked as “virtual copy“Working exclusively with street vendors to optimize their takeaway system and provide delivery services with their own app and fleet.
On the other hand, kEATchen partners with eight third-party food delivery companies such as GrabFood, foodpanda, EASI and airasia food, among others, to offer food from their suppliers. This may be a better option for both kEATchen and its suppliers, as it is cheaper to outsource rather than hire and retain additional staff for a company, especially on its current scale.
While expressing interest in developing its own ordering platform, cloud cooking may be better off without one, as it is subject to maintenance and development costs. Vendors working with kEATchen would also have better visibility into the most popular food delivery applications and could take advantage of existing users and promotions co-funded by these companies.
Although, that doesn’t mean it’s the cheaper solution. Food delivery apps charge their own commissions, ranging from 10% on airasia food to 25% on GrabFood and foodpanda, according to our statistics previous interviewees working in cloud kitchens.
Although kEATchen did not disclose the rates for their services, their team stated that there are service fees for operational management that they support. These services can range from backend distribution management to kEATchen team marketing initiatives.
“Any F&B operator that is on delivery platforms will accept the additional administrative workload that entails. We take these non-productive tasks to suppliers and let them focus on making good food while we have a team that takes care of the non-productive tasks, ”Martin told Vulcan Post.
Adoption of local suppliers
While cloud kitchens are available for entrepreneurs to start a new brand at low cost, kEATchen is mostly a place where existing vendors can scale in a sustainable way. That means, even if it’s a street vendor than an existing one copy chooses to work within kEATchen, the latter encourages them to remain their original store to also serve customers who have dinner when they are safe again.
“Joining kEATchen will help them expand their geographic distribution to their customer base,” Martin said. “This also increases their brand awareness so that they can compete with the larger food chains that currently enjoy the benefits of the online food ordering trend that Malaysians have been constantly adopting since the pandemic began.”
Contrary to what we would have assumed, kEATchen marketers weren’t hard-to-convince people when Martin’s team was trying to get into it.
Thus, since the development of kEATchen in July 2020, they have managed to hire seven different vendors to sell dim sum, chicken rice, fried rice, curry mee, chicken with soy sauce, etc. before the official launch in May 2021.
While Martin was unable to share the average revenue that kEATchen providers get through cooking and cloud services, it can be assumed that there are benefits that can be gained.
This is because there is no friction that holds customers back from placing the order; they can place orders from multiple kEATchen vendors and, for example, only pay a shipping commission to GrabFood.
But, of course, the cost of certain dishes has been marked slightly to take into account commission rates and food packaging, a standard practice for delivery platform companies.
For its future plans, kEATchen will focus on making promotions to incorporate more F&B vendors. On a larger scale, the team hopes to collaborate with government agencies in providing kEATchen services to affected street food operators to ensure that vendors can digitally evolve their business.
Featured Image Credit: kEATchen
