Competition heats up as GrabFood opens first shared kitchen here
GrabKitchen facility in Hillview ups ante in competition with rival food delivery firms
GrabFood has opened its first shared kitchen space here as it looks to take a bigger bite out of a regional food delivery market estimated to be worth $20 billion by 2025.
Housing over 10 food and beverage brands, the 557 sq m GrabKitchen facility in Hillview, near Upper Bukit Timah, will allow nearby residents to get food from merchants such as Wolf Burgers and bubble tea brand PlayMade delivered to their doorstep via a single order on Grab's app.
Customers can also opt to pick up their orders or consume them in a dine-in area in the industrial building.
Head of GrabFood Singapore Dilip Roussenaly said yesterday it had identified gaps in local demand and supply, sussed out the right merchants, and looked for the right location before launching the space.
The move has turned the screws on rival food delivery firms Foodpanda and Deliveroo, which already operate their own shared kitchens here. GrabFood's move comes amid an ongoing investigation by the competition watchdog into the sector.
Shared kitchen operator Smart City Kitchens (SCK) had complained to the Competition and Consumer Commission of Singapore it was being shut out by Deliveroo and GrabFood.
Yesterday, Mr Roussenaly said GrabFood is contributing to the investigation but is not the subject of the probe.
"We started not so long ago to work with some of the merchants out of SCK in the east," he told reporters. "We want to support merchants regardless of where they are."
Mr Roussenaly would not comment on the cost of GrabFood's new facility or its arrangements with the merchants, but said there is no exclusivity.
He said GrabFood has not yet discussed allowing deliverymen from other firms to use the GrabKitchen facility.
While there is a year-long contract, the merchants have exit clauses and are not locked in.
He said: "Of all the merchants we have spoken to and are here, they really see this as a future avenue for them, so it is not a short-term gig... They are trying to make it work (and) our job is to make them successful and 'de-risk' that venture for them."
The GrabKitchen space has a Singapore Food Agency (SFA) licence and merchants using the individual kitchen units, which are between 15 to 21 sq m, have their own licences as well.
Grab will conduct periodic inspections to ensure hygiene standards are met.
Mr Roussenaly said: "We trust the merchant to do the right thing and live up to their own SFA licence."
With the launch, GrabFood now has 50 shared kitchens across five South-east Asian countries - mostly in Indonesia- and plans to open more in the coming year.
Mr Ian Lin, who is running three food brands out of the GrabKitchen here, said costs are much lower compared with opening a new physical outlet.
Two of his eateries, Thai Dynasty and Bowl and Grill, are in food courts, while virtual eatery Lady Boss Mala was created specifically to cater to deliveries in the Hillview area.
Since he started operating out of GrabKitchen on Dec 9 last year, sales have grown about 6 per cent week-on-week.
Mr Lin said: "Without the hassle of having a front service area, I can just focus on hiring good chefs. It cuts my manpower costs and solves my manpower dilemma."