Deliveroo, an online food delivery app breaks into the physical market.
Moving out of its domain space, online food delivery app Deliveroo opens its first physical brick-and-mortar restaurant in Hong Kong.
Located at High Street, Sai Ying Pun, the store named as ‘Deliveroo Food Market,’ will serve as both a kitchen, as well as a storefront where customers will be able to choose from 15 different dining concepts.
Brian Lo, general manager of Deliveroo told CNBC,
“We find there is an opportunity to bring our online to offline model to our customers. Hong Kong is one of the most expensive rental prices, so the pressure on restaurant operators is very high and this model works very well for them.”
London based food delivery app Deliveroo will host five popular restaurants offering a variety of dishes, like Shanghai noodles and Hawaiian fish. Conceptually, customers can walk in and order food from these restaurants or place the order for delivery.
Lo said that the partners in the Wan Chai District in Hong Kong generate high margins, between 10-15 percent and hopefully, the company’s food market concept will let restaurants increase delivery sections with better cost.
“This is a location [where] we can have a closer touch with the residents nearby and understand their dining behavior. It allows us to test our new brands.”
Pizza Express, on the other hand, will use part of its kitchen at Deliveroo to run a virtual brand Pasta Project.
Liam Collette, Managing Director of International at Pizza Express said,
“The Pasta Project, as a virtual brand, gives us the opportunity to be more adventurous and try riskier things. Restaurants are not going to be eliminated by delivery and we're going to continue to expand, but it is a key part of the dining scene, so we need to lead into that."
Deliveroo will now consider opening markets at more locations across Kowloon and the New Territories, which has a strong demand for food delivery. Although the brand has not come up with a decision yet, Lo said,
“The Food Market showcases Deliveroo’s online to offline expansion. We will keep exploring new opportunities in Hong Kong though we have been facing fierce competition. With the latest addition, I am confident that Deliveroo is capable of enhancing penetration in the city.”
According to a report from CNBC, Deliveroo will expand the concept globally if found successful.