Instead of eating out or cooking at home, more people are ordering in. And the insatiable appetite for food delivery business is fuelling the growth of cloud kitchens in Asia’s biggest markets.
Cloud kitchens – also known as ghost kitchens – are shared spaces where multiple food-delivery companies can whip up meals to be sent out to be eaten elsewhere. They have mushroomed in China and India, and are fast expanding in other markets such as Indonesia, South Korea and Japan.
“For the takeaway business in the modern gig economy, it’s filling a real need,” says Pranav Nichani, Retail Manager, JLL India. “There is no need for furniture or waiting staff, and they are not limited by their physical location.”
In China, leading cloud kitchen provider Panda Selected opened 103 kitchens across the country in the last three years, with 40 in Shanghai alone.
Cloud kitchen unicorn Rebels Food has 235 kitchens in 20 Indian cities, churning out two million orders a month. It recently received a US$125 million funding and plans to build 100 cloud kitchens in Asia’s third most populous country, Indonesia, along with homegrown start-up GoJek in the next 18 months.
The demographics are stacked in favour of cloud kitchens due to the shift in consumer preference.
“In China, 62 percent of the users who use food delivery apps are 29 years old and below. This is a number that will only rise as the younger generation is very comfortable with the concept”Tyson Wang, Retail Specialist at JLL East China.
“Naturally, we can expect a sustained boom in cloud kitchens to support that.”
Revenue from online food delivery in Asia will hit US$58.4 million this year, and is projected to grow 10.5 percent over the next four years, data from research firm Statistica shows.
In cities with high rents, the low barriers to entry and low-cost nature of the cloud kitchen model are another boon. Currently, most cloud kitchens tend to occupy underutilised warehouses or industrial office blocks. Rents and operating costs are also significantly lower since it is a shared space.
“The initial outlay for a restaurateur in operating out of a cloud kitchen is much less than operating a full-fledged restaurant”Pranav Nichani, Retail Manager, JLL India
“To further save costs, such restauranteurs can also opt for a higher revenue share with the cloud kitchen operator. The focus is simply on preparing good food with speed.”
Cloud kitchens in India and China are known to offer discounts on rent to attract chefs and restaurants to set up with them. They also offer a revenue share model and simply charge their tenants turnover rental based on their sales performance.
Built for scale
Even popular brick-and-mortar restaurants are jumping on the bandwagon in order to scale up and reach new customers.
In India, familiar names such as Punjab Grill, Pino’s Pizza, and Zambar and global fried chicken chain Kentucky Fried Chicken are planning to add cloud kitchens to expand in the country. In China, Starbucks tied up with Alibaba to operate its brand of cloud kitchen called Star Kitchen out of the latter’s Hema supermarkets in Hangzhou, Shanghai and Beijing.
The cloud kitchen market is likely to see more investment from interested parties as consumer demand rises. Malaysia’s leading cloud kitchen start-up Dahmakan got a leg-up with funding from Silicon Valley veterans Y Combinator and Partech Partners.
SoftBank-backed Indian hotel chain Oyo is creating its own brand of cloud kitchens called Adrak, while Alibaba is investing in Hong Kong cloud kitchen start-up Nosh.
“The market is bullish,” says Wang. “But I don’t foresee there will be a lot of independent dark kitchens that will begin to operate in the near future. More established players with the muscle and means to expand will stand to capitalise from this trend.”
Source : The Investor
Feathers Fly Over: Cock-fighting is One of Thailand’s Most Popular Activities
Some Thai citizens are fighting to end this practice. The notion of animal welfare is slowly gaining momentum in the country. Their push saw the introduction of the first-ever animal welfare law to the applause of animal rights activists.
Cock-fighting is a popular sport in Thailand. If you thought that was a cliché, then consider the fact that top-fighting birds could cost up to 3 million baht, and gambling wagers are usually as large as 22 million baht.(more…)
What Are You Covered For With Comprehensive Car Insurance In Thailand?
As driving in the Land of Smiles can be so precarious with the number of accidents each year, you will want to consider getting comprehensive insurance for your vehicles.
More COVID-19 restrictions are relaxed in Thailand from 16 October 2021
Bangkok, 16 October, 2021 – The Tourism Authority of Thailand (TAT) would like to provide an update that more COVID-19...
China’s economy stumbles on power crunch
BEIJING (Reuters) – China’s economy hit its slowest pace of growth in a year in the third quarter, hurt by power shortages, supply chain bottlenecks...
Quarantine-Free Thailand Reopens for Vaccinated Tourists From 1 November 2021
The Tourism Authority of Thailand (TAT) would like to confirm that Thailand is all set to welcome fully vaccinated foreign...
The ASEAN-India Trade in Goods Agreement
The ASEAN-India Trade in Goods Agreement (the “Agreement”) is a trade deal between the ten member states of ASEAN and...
Bangkok lifts more COVID-19 restrictions
In response to the Royal Thai Government’s announcement to relax more COVID-19 controls in the dark-red zone provinces, which include...