With increasing rate of smartphone penetration and fast adaptation rate to technology, people in Bangladesh are leaning towards digital services at a fast pace. One such service - food, groceries, and other essential online delivery services - has seen a substantial growth and increased further during the Covid-19 nationwide shutdown.
One name we can associate with this narrative is foodpanda Bangladesh - the country's leading food and grocery delivery service, which is being headed by Zubair Siddiky, the co-founder and managing director of foodpanda Bangladesh - a subsidiary of Berlin based Delivery Hero SE, a global leader in the online delivery marketplace, for the last seven years.
Alongside his position at foodpanda, Zubair is also a director of Bangladesh Chamber of Industries. In addition, he is also a Partner of leading HR consulting firm, HR Connections BD, and an Angel Investor in the Bangladesh start-up scene.
The Business Standard interviewed Zubair recently, who shared with us industry insights and more about foodpanda's success in the recent years.
The Business Standard (TBS): foodpanda celebrated its seventh anniversary last month. How has the food delivery industry, as well as foodpanda as a company, evolved during this time?
Zubair Siddiky (ZS): When we launched foodpanda Bangladesh in 2013, online food delivery was a fairly new concept to most restaurants and consumers. Since then, we have been working diligently to build awareness around our service and platform.
We have consistently invested in technology and innovation to improve the quality of service for all our stakeholders - customers, restaurants and shops, and delivery partners - over time.
Investment in logistics and technology has resulted in reduced delivery time, advanced order tracking system, efficient order management, and a superior customer experience. We have also invested heavily in rider and restaurant applications to make the whole process of delivery seamless.
Our rider partners have had the opportunity to dictate their own hours and earn a living. Our restaurants and shops partners of all sizes have had the ability to grow their business on a digital platform and expand their reach. Streamlining the delivery process and making a wide variety of options available to customers has made online delivery more convenient over the years.
In December 2020, we finished expanding our service to 64 districts, making online delivery accessible from all parts of Bangladesh because foodpanda is a service that all people can enjoy regardless of whether they live in a big city or a small town.
TBS: A number of entities have entered the food delivery industry since the beginning of the pandemic. How does foodpanda view this development?
ZS: The emergence of new entrants is a sign that people see value in the food delivery industry and the opportunities it brings for the ecosystem. The pandemic has shown people that online delivery is trustworthy, safe, and essential.
Online delivery has made it possible for customers to get food, groceries, and other products during the lockdown phase. Traditional food and beverage, and even some convenience stores have embraced the digital channel as a new way to grow their businesses online and tap into the digital economy.
The online food delivery market is fairly young, and as a result thrives on healthy competition. I believe that competition has only encouraged us to innovate and explore new opportunities that empower and better serve our community. For example, we recently launched several pandamart, a series of our own darkstores, in and outside the capital.
As a venture, pandamart brings speed and convenience to consumers by making thousands of daily essentials available for on-demand delivery within 15 to 30 minutes.
TBS: How did foodpanda contribute to its community in Bangladesh? What special measures have been taken to support the community during the Covid-19 pandemic?
ZS: Over the years, foodpanda has invested heavily to boost the growth of the food delivery industry. As a digital platform, we have enabled traditional restaurants and shops to grow their business and reach a wider customer base.
In 2020, many entrepreneurs are opening delivery-only kitchens because of the significant growth of the food delivery industry in our country.
We onboarded close to 24,000 restaurants, shops, and home chefs in 2020 - digitizing businesses and enabling them to grow on a digital platform, as restaurants closed dine-in during the lockdown period. Expanding the home chef program made it possible for hundreds of home cooks, mostly women, to generate their own income while staying home.
For customers this meant increased choice of selection, improved quality due to higher competition and an affordable and efficient manner of delivery. We also enabled income opportunities for thousands across the country including our rider partners.
In 2020 alone, foodpanda onboarded close to 40,000 rider partners, providing them with a platform to earn a living flexibly during these uncertain times. Beyond providing riders with income opportunities, we also focused on making their jobs easier and safer. Riders were equipped with ration bags, face masks, and hand sanitizer, so that they could stay clean and protected while on the job.
In addition to these initiatives, we introduced a contactless delivery option as a means to keep our community as safe as possible. The introduction of q-commerce operations also helped to revolutionize the customer experience by making it possible for individuals to get their essential goods with no hassle.
TBS: Do you think food delivery services will eventually usurp the culture of eating out?
ZS: Not at all. Home delivery and dining out are meant to work in conjunction with one another, not against each other as online delivery brings additional revenue for restaurants or shops. This is the case as online ordering is all about speed and convenience, while dining out is about enjoying a communal experience.
Our goal is not to usurp dining out, instead the goal is to make food, groceries, and other essentials accessible to everyone whenever they need them. We empower restaurants to digitize their businesses, while creating more options for customers.
If you look at more matured food delivery markets like the US, UK, or China, in-dining still remains a major portion of restaurant revenue despite the fact that online delivery revenue is growing faster than other segments.
TBS: Does foodpanda play any role in ensuring the quality of food, or does that fall solely on the restaurants?
ZS: foodpanda is committed to ensuring quality. This means that not only do we want deliveries to be efficient, but we also want orders to be packaged and delivered properly. To ensure this we maintain a standardised onboarding process for all vendors present on the platform.
We also encourage our restaurant partners to keep safety, transportability, and freshness in mind when it comes to packaging food. We have enabled customers to leave reviews and ratings on the platform and communicate to us through our live chat and email.
Our key account managers work closely with the vendors, making them aware of customer feedback and concerns. This helps vendors to make changes and improvements where they are needed. Helping our restaurant partners to improve their quality and service helps us better serve our community.
TBS: In the past, delivery used to take longer in general and there have been a lot of complaints from the customers against such services. What steps has foodpanda taken to tackle this? What are the other major pain points for customers and how are you tackling them?
ZS: As mentioned earlier, we have invested heavily on improving our logistics technology and processes. Delivery time consists of two components.
First, the order has to be accepted and a preparation time has to be designated. The second component involves dispatching the order and identifying the drive time of our delivery partners.
Our restaurant operations team works very closely with restaurant partners and uses data science to optimise and reduce food preparation time. At the same time, we are continuously improving our dispatching algorithm using machine learning and data science.
All these measures, along with improved rider compliance, have helped us reduce our average countrywide delivery time to 22.8 minutes from 45 minutes in just two to three years. Thanks to the hard work and dedication of the team, our current delivery time tops the class and is comparable to any aggregator around the world.
The other area where we have concentrated our efforts is order cancellation. The restaurant operations team and key account managers work very closely with vendors to reduce cancellations using available data. We have also introduced strict compliance measures on restaurants with a cancellation rate higher than the permissible threshold.
This has helped us reduce the overall countrywide cancellation rate and improve customer experience significantly.
TBS: Why doesn't foodpanda have a hotline for customer service and complaints?
ZS: We had to remove the customer service number a couple of years back when we started scaling up our business, as we needed to look into how we can better and more efficiently serve our customers.
Through live chat and emails an agent can handle multiple customers during peak hours at the same time, which increases efficiency. On the other hand, an agent can only handle a single customer at a time on phone lines making the whole process inefficient and unscalable.
We work on extremely thin margins in the food delivery business and it is paramount that we incorporate efficient processes and optimise operational costs to make the business sustainable.
Furthermore, the integrated help center minimizes the chance of miscommunication and allows our agents to provide a better service to our customers.
TBS: What will be foodpanda's expansion plan and forecast of the future?
ZS: As mentioned previously, we have expanded our food delivery service to all 64 districts across Bangladesh. We will continue to expand our services in the existing delivery areas and to areas where there are food establishments and shops.
We will ideally scale up through our cloud kitchens and operator partnerships. We also believe, in 2021 and beyond, q-commerce will be a key driving factor for foodpanda's growth. We hope to spearhead a nationwide expansion of pandamart while working to improve the selection in existing stores.
We expect a very exciting 2021 ahead of us with continuous innovation to improve customer experience.