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Food deliveries sustain business during Covid

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Food delivery service platforms are some of the most lucrative channels for Cambodia’s budding food and beverage sector and provide a lifeline for many smaller businesses. Photo supplied

Food deliveries sustain business during Covid

As the Covid-19 crisis prompts a new normal, food delivery companies continue to sustain their business momentum and performance fuelled by fear of the disease and increasing customer migration online.

Their platforms are some of the most lucrative channels for Cambodia’s budding food and beverage sector and provide a lifeline for many smaller businesses.

Khmer restaurant chain Meatophum, for example, had seen solid growth in the months before the pandemic, constantly adding to its dozens of branches across the Kingdom.

Its general manager Rithya Sinh said: “2019 saw a steady growth of our business, thanks to our customers who support us and appreciated our service.”

But its ambitions, like those of many businesses across Cambodia, were largely cast aside when the pandemic gripped the world.

Sinh said: “Our business dropped from 100 per cent occupancy to 30 per cent, so we decided to temporarily close the shop in April.”

“That’s when a friend told me he had seen this new company, TADA, which was offering free delivery and I thought, I have to try that. So we began using the service when we reopened our shop on May 1.”

South Korean-owned ride-hailing app MVL TADA Cambodia Co Ltd (TADA), a product of Singapore-headquartered start-up MVLLABS Pte Ltd, debuted in the Kingdom last year.

As part of its launch of TADA Delivery in April, it offered the service free for a month to businesses. TADA says about 50 mainly small businesses have signed up.

Sinh added: “Of course, when we receive services for free, we save on costs. But more importantly, free delivery means our customers will pay less so they can order more.

“So since we adopted the free delivery service from TADA, our food orders increased by 15 per cent.”

Drew Price, the owner of Carolina BBQ in Chamkarmon district’s Tuol Tompoung commune, told The Post that he chose to close his dining room to ensure the safety of his employees.

“This decision was not only for our customers but also for our employees. I couldn’t live with it on my conscience if someone caught the coronavirus and passed it on to his family,” said Price.

With reduced overhead and a jump in deliveries, Price credited Nham24 and other delivery companies for him not only reaching his break-even point but also recording a small profit in the weeks after closing in-house dining.

Sreypov Neang, who runs a tailor shop in Phnom Penh, said the quality of her products has helped maintain customer satisfaction and loyalty. “But it’s also thanks to TADA Delivery that we have been able to maintain our revenue although we see fewer walk-in customers,” she said.

Seavling Veng, an online sales manager at baby product retail chain Baby Outlet, said: “During the Covid-19 pandemic, our online orders surpassed our in-house delivery capacity so we reached out to TADA Delivery for help.

“They have been very helpful to us. More importantly, their service is reasonably priced and reliable, too.”

Though it no longer offers free deliveries, TADA said it caps the price of same-day deliveries at 3,000 riel ($0.75) within the capital’s limits for merchants signed up for its delivery service and offers express service.

Nham24 founder Borima Chann said it was experiencing a shift in the trend for its services due to the outbreak.

He said while demand from office workers remained high, home deliveries are becoming increasingly popular.

As competition in food delivery heats up, cashless payment options have risen accordingly, with most platforms accepting ABAPay, UnionPay, Wing, Pi Pay, and major credit cards.

Chann said: “We encourage people to pay online, but if they choose to pay with cash, the customer will then leave the money for the driver at a safe distance.”

In August 2018, $5 million venture capital fund Smart Axiata Digital Innovation Fund (Sadif) acquired a minority stake in Nham24.

Sadif is managed by investment and advisory firm Mekong Strategic Partners Co Ltd and aims to spur the digital ecosystem in Cambodia.

Chann said with the additional funding, Nham24 will continue to focus on delivering the best possible customer service and boost partnerships with local restaurants. “We look forward to collaborating with Sadif to grow our business and strengthen our market position.”

Meanwhile,Jonathan Meuret, the general manager of online supermarket platform Delishop.Asia, said: “The sudden and rapid spread of Covid-19 has forced everyone to scale back on many social interactions and transactions we used to take for granted.

“The simple act of going outside to buy food and other essential items at a store now requires more thought and precaution. Every day, our team is energised to keep coming up with new solutions to execute safe deliveries and transactions.

“Delishop.Asia adheres to socially responsible business practices and precautionary measures that ensure everyone’s safety.

“Through contactless delivery and online payment options, we are preventing any virus transmission by significantly reducing interactions between customers and delivery partners,” he said.

In October, Phnom Penh-based venture capital firm Obor Capital Co Ltd announced that it had closed an early-stage equity fundraising deal with Delishop.Asia which it said will transform the Kingdom’s online shopping experience.

Obor Capital’s investment includes an injection of fresh capital and the acquisition of Delishop.Asia’s secondary shares.

Delishop.Asia delivers some 9,000 food and beverage, groceries, cosmetics and other consumer goods from more than 40 suppliers.

TADA general manager Poly Chim said: “Supporting our drivers, supporting local businesses and supporting the government in its effort to return the country to a normal life are all very important for TADA.

“We will continue to roll out new initiatives to make good on our vision of being a part of the fabric of Cambodian society for years to come.”

Meatophum’s Sinh said: “Today, we are faced with Covid-19. What comes next is yet to be known. So I would recommend adopting technology to better keep businesses in good shape, no matter what happens.”

The number of registered mobile SIM cards reached more than 21 million last year, up nearly 12 per cent compared to 2018, said a Telecommunication Regulator of Cambodia report.

The figures show that last year, the number of registered SIM cards provided by the Kingdom’s six mobile operators reached 21.63 million – gaining 11.63 per cent over 2018.

The number is equivalent to 133 per cent of Cambodia’s total population, which stands at just over 16 million.

Registered Facebook accounts also climbed 29 per cent to 8.8 million last year.

The report said mobile internet usage also saw a rapid increase with 16.12 million subscribers using their mobile phones to access online content last year, an increase of 18.47 per cent.

Fixed-mobile phone users dipped by 35 per cent to 57,438 while fixed-broadband internet subscribers grew to 224,104, a 46 per cent surge.

There are currently six mobile companies operating in Cambodia – CellCard, Metfone, Smart Axiata, qb, Seatel and CooTel.

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