SINGAPORE – Malaysian airline AirAsia has launched its food delivery service in Singapore as it continues to look for alternative sources of revenue outside the battered aviation sector.
Its airasia food platform will initially feature about 80 restaurants, including Swee Choon Tim Sum Restaurant and No Signboard Seafood. About 300 more restaurants are in the process of boarding, AirAsia said Tuesday (March 2nd).
The platform will charge restaurants a 15% commission per delivery, instead of going ahead with plans for a zero commission model.
The rate is still lower than that offered by the three major food supply operators: GrabFood, foodpanda and Deliveroo. AirAsia said the lower commission in turn would lead to lower charges for customers.
AirAsia also said it had recruited about 500 suppliers, and plans to double that figure in the third quarter of the year.
Travelers will reach a maximum distance of 20 km from the listed restaurants. AirAsia added that the delivery fee typically ranged from $ 2.99 to $ 20.
Chief executive Tony Fernandes said during a virtual press conference that the airline would try to give better value to the food delivery business, with cost reduction as one of the key aspects.
“Just as (as) AirAsia doesn’t have all the luxuries of Singapore Airlines, airasia food, for example, we don’t have maps. We don’t think you need to know where your driver is because that costs us,” Mr Fernandes said.
“We believe you will still be able to contact us to find out where your food is and this is an unnecessary flower.”
He said AirAsia is aware of the tough competition that the current dominant food delivery players will face.
“Will we be Singapore’s largest food delivery service? Probably not, but I think we will be a useful segment of the market, we will be a very useful segment for small restaurants.”
Airasia Food seeks to generate interest in its service by offering unlimited free delivery for two weeks between March 2 and 16. This will apply for shipments less than 8 km from the point of order.
It is committed to delivering all orders within 60 minutes and will allow customers to earn reward points that can also be used for AirAsia flights.
Fernandes acknowledged that a 60-minute delivery schedule is relatively long, but said it will be shortened.
Lim Ben-Jie, head of e-commerce at Airasia Superapplication, said companies will be able to access the Airasia food platform within 48 hours after registration. They will not have to pay any registration fee.
He added that his suppliers can earn up to $ 700 a week on average.
Marketing executive Tan Kwang Yu, 27, who orders food delivery services for convenience and when there are deals, said he will be interested in using the airasia food app if he can offer several options at a higher price. low. The speed with which food can be delivered will also be key, he added.
Research firm Statista has said the online food delivery accounted for a $ 464 million (US $ 616 million) business last year in Singapore.
Nanyang Business School’s adjunct professor Zafar Momin said that while AirAsia is a new entrant to the food delivery scene, it has the advantage of being a well-known company. He noted that his brand and marketing knowledge could help him incur it quickly.
But he warned: “Profitability has been elusive for most food delivery business owners in Singapore and around the world.
“Even if AirAsia’s entry into the local food delivery business becomes a consolidated player in the near future, it will face the same challenges as others to become financially viable soon.”
Associate Professor Lawrence Loh, of the National Business University of Singapore Business School, said AirAsia already has a customer base looking for value-for-money deals, so its food delivery service will have to stay consistent with this profile.
On what could be AirAsia’s motivation to diversify its business, Professor Loh said: “It is clear that air travel will not earn in the near future, so some money is better than money.”
He added: “There are many companies in the market that have completely changed from their original model … I think maybe this is the beginning of the step towards an overapplication and who knows, maybe they will get out of the aviation business.”