Deliveroo Launches Virtual Restaurant Brands in Hong Kong, Boosting Restaurant Operator Income by 85%
● Deliveroo offers 100+ virtual brands in Hong Kong and will have 200 by year-end
● Virtual brands enable restaurants to boost their business without incurring extra operating costs and try new ideas without the need for committing to rental risks / high capex cost of operating an expensive new premise
● Hong Kong restaurants launching virtual brands on Deliveroo’s platform were able to boost their revenues by 85% and more than double profits
Hong Kong – 26 June 2019 – Deliveroo, the food delivery service leader who has over 60% market share in Hong Kong, has today revealed how it is working with restaurants to create additional ‘virtual restaurants’, including in its state-of-the-art, delivery-only Editions kitchens. Deliveroo uses its expertise to help restaurants create, test and bring to market new brands that would be only possible due to the nature of online delivery.
Creating virtual restaurants allows existing restaurants to increase revenue and customers by offering new or complementary cuisines from their current kitchen, but under new branding. Restaurants are able to therefore improve productivity and efficiency of existing kitchen staff and chefs and save on food costs and cut wastage, without increasing any of the fixed costs such as rent and other operating costs. For an industry that operates under challenging economic headwinds, virtual brands therefore provide a low cost, low risk way of increasing revenue and profit.
Deliveroo currently has more than 100 virtual brands live across the platform in Hong Kong, and will have 200 by the end of the year. The most popular virtual brand cuisines in Hong Kong are first – Chinese; second – Hawaiian Poke; third – Chicken Wings. The most popular Chinese virtual brand is Soupday; the most popular Hawaiian Poke brand is Kai; the most popular Chicken Wing brand is Wingman. Since the inception of virtual brands, Deliveroo has seen web and app traffic from prospective customers to these brands jumped by 800% since January 2019. Furthermore, sales per store of virtual brands have also increased by 3-fold since the beginning of the year.
Creating a successful virtual brand is no easy feat – Deliveroo works closely with their partners from start to finish. It starts with big data, which is used to identify hotspots for growth, areas with high customer demand that are being underserviced with missing cuisine types, unsuitable price points, or a lack of restaurants in general. That data is then used to guide the creation of an optimal menu, from layout, to pricing recommendations, to featured items, all designed to help restaurants leverage existing ingredients and under-utilized kitchen space. After a strong quality control process which involves tasting a lot of food and operational checks, Deliveroo also provides strong marketing support through online and offline channels, sponsored promos and discounts, and post-launch diagnostics of customer behavior towards the brand, not to mention partners getting access to Deliveroo’s global network, with opportunities to source cheaper packaging or food ingredients, learn new recipes, or even license foreign brands.
There are 18 virtual brands at Editions sites in Hong Kong, with nine in Wan Chai and nine in Sai Ying Pun.
A virtual brand appears as a separate restaurant on Deliveroo with a new identity driven by a new cuisine or menu offering. It means BBQ joints launching Mexican menus, Greek restaurants offering healthy protein bowls, or a favourite pizza joint delivering gourmet wraps.
In markets around the world, restaurants on Deliveroo that launched virtual brands with the company have seen on average a 70% increase in revenues as a result of those brands. In Hong Kong this is higher at 85%.
Commenting, Brian Lo, GM Deliveroo Hong Kong, said:
“Virtual restaurants mean more great food for our customers. By creating new brands out of existing kitchens, restaurants can really boost their business and try new ideas without the need for expensive new premises. At Deliveroo we are using our knowledge, data and insight to help restaurants launch new brands in Deliveroo Editions and from their high street kitchens. We work with chefs every step of the way to make virtual restaurants a success from concept to delivery. The end result is great for restaurants and is helping to increase customer choice across Hong Kong.”
Case study: Wingman
Launching a new virtual concept and successfully opened its first brick & mortar restaurant in Central after proof of concept.
What’s the background?
Despite the growing trend for fried chicken, and wings in particular, no restaurants in Hong Kong specialised in them. Deliveroo shared the insights of this market potential with two entrepreneurs, Jack and Elliot who later became the founders of Wingman. The two parties decided to work together and build a virtual brand on Deliveroo platform.
What were the solution and results?
With the food trend and market data provided by Deliveroo, the founders created a range of wings infused with the most popular flavors. Once the flavours, brand and packaging were finalised, Wingman was launched just in time for the World Cup in July 2018, riding on the late night delivery offered by Deliveroo to kick this off a great start. Through July and August Deliveroo supported the brand with an OOH advertising campaign, and backed it up with a strong social media presence. Since its launch in July 2018, the brand has been growing in popularity via delivery business, acquiring new customers and expanding to new locations. Not only they have been acquiring 35% new customer growth month on month, but also opening its own restaurant door in Central in May 2019 – all happened within a year.
To celebrate the opening, Wingman created an exclusive combo and partnered with Deliveroo in a flash marketing campaign to deliver hot wings by hot guys. In this campaign, the brand has acquired more than 100 new customers and generated 150% more traffic to their website. The revenue they gained in May has tripled than previous months, which creates a solid ground for its 1st restaurant in Central.
“Here at Wingman, we owe a large portion of our success to Deliveroo! With their help, we were able to gain a foothold in the market that we would never have been able to achieve otherwise. By giving us a platform to sell, develop and refine our product, we were able to gain a market share without the large investment usually associated with opening an F&B outlet in Hong Kong. Working alongside the Deliveroo team, we were able to run a number of cross promotion campaigns, as well as providing us with a number of great data points we could utilise to improve our business model. This platform has allowed us to develop to the point that we have now opened our first sit-in restaurant, less than a year after delivering our first box of chicken wings! It really is a dream come true!” Jack Law and Elliot Nicholas, Founders of Wingman.
Case Study: PizzaExpres
Subject line: Introducing a new food type to an area and achieving new customer growth
This was an opportunity to introduce a new dining concept and serve a creative menu at new targeted market segments.
What’s the background?
PizzaExpress always strives to bring delightful dining experiences to customers. In addition to the existing menu the brand provides, there is a demand gap in pasta and salad based on customer feedback and the data and analysis provided by Deliveroo. The kitchens also have the capacity to deliver more food during lunchtime and in the afternoon.
What was the solution?
Leveraging existing knowledge and manpower, PizzaExpress has launched The Pasta Project at Editions, a platform introducing new dining concept and serving a creative menu. Deliveroo consulted the brand with menu setting and operation by identifying relevant food trends using big data.The virtual brand has particularly focused on delivering great food to customers during lunchtime to capture new target segment and generate additional revenue.
What were the results?
The Pasta Project brand kicked off its first service zone in Wan Chai and received tremendous feedback from the consumers and has now expanded to five locations. This allows the brand to see the response from respective areas and the potential of the brand. With The Pasta Project, PizzaExpress has successfully tripled lunch turnover without having to invest in additional staffing, overhead cost and kitchen space. In addition, the brand has acquired new customers from The Pasta Project and is working to develop other virtual brands in the pipeline to delight diners with more variety and choices during different parts of the day and locations where Deliveroo’s data and analysis show cuisine and price gaps.
Case study: Soupday
Subject line: Offering a wider variety of cuisine and geographic reach with virtual brands and Deliveroo
What’s the background?
Soupday was launched in June 2018 in Central. The innovative menu, food ingredients and the thematic shop design had gathered the likes of its neighbourhood in the Central area. Though, the founder felt that a personal touch is missing especially when ones are sick or tired as they wouldn’t want to leave their beds or sofas.
What was the solution and results?
Soupday partnered with Deliveroo to launch its first virtual brand, CongeeDay, on the platform. With the food trend information, data and the additional Wanchai Edition site provided by Deliveroo, Soupday was able to target the right customers from Sai Ying Pun to Causeway Bay and achieve 20% customer and revenue growth in only one month between April and May 2019, not to mention the great results by CongeeDay. Following the success of CongeeDay, the parties launched another virtual brand – Dim Chill in May 2019 after identifying the cuisine gap.
Eric Fung, founder of Soupday said “All we want to do is to let our customers enjoy great food. This is why food quality is so important to us that we have to control it very closely. We preserve hotness and freshness of food by delivering via Deliveroo. We want customers to enjoy our quality food in the comfort of their own home or in their own environment. As we don’t have a kitchen or restaurant everywhere to deliver our food to customers, having a virtual brand on Deliveroo helps us be everywhere in Hong Kong to grow the business quickly without a massive investment upfront. The personal touch given by the Deliveroo team has been amazing and is the key ingredient to the success of our partnership.”
Deliveroo is an award-winning delivery service founded in 2013 by William Shu and Greg Orlowski. Deliveroo works with over 80,000 best-loved restaurants, as well as 60,000 riders to provide the best food delivery experience in the world. Deliveroo is headquartered in London, with 2,500 employees in offices around the globe.
Deliveroo operates in over 500 towns and cities across 14 markets, including Australia, Belgium, France, Germany, Hong Kong, Italy, Ireland, Netherlands, Singapore, Spain, Taiwan, United Arab Emirates, Kuwait and the United Kingdom.
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