Singapore's F&B industry banks on digitalisation to survive circuit breaker

Digitalisation has become the industry’s strongest support beam.

Singapore’s food and beverage (F&B) industry has been hit time and again with operational challenges especially with the most recent circuit breaker last 22 July.

It seemed like another grim outlook for the F&B industry as restaurants are once again forced to close their doors against dine-in customers.

However, according to Alan Goh, chief revenue officer of Singapore-based F&B e-commerce platform, Oddle Eats, restaurants that have embraced digitalization and innovation have managed to survive and even thrive since the start of Phase 2 Heightened Alert (P2HA) restrictions.

In an exclusive interview with the Singapore Business Review, Goh said there has been a consistent rise in the F&B e-commerce sector since last year as F&B businesses become increasingly aware that establishing a digital presence is crucial to sustaining operations.

“Many F&B businesses have already established an online presence since the previous lockdowns and are better prepared this time around, having accelerated the adoption of digital solutions for their businesses,” Goh said.

One year difference

“Since the circuit breaker one year ago, F&B businesses have come a long way and are now much better prepared for situations like P2HA, where they must rely solely on takeaways, deliveries, and predominantly e-commerce sales,” Goh said when asked what’s the difference between the first circuit breaker in 2020 and the recent one.

Goh said that last year has given F&B businesses to nimbly adjust their manpower and operations to cater to P2HA. However, merely adopting a digital presence or adjusting operations whenever necessary is not enough.

Goh stressed the need for the F&B industry to keep up with other industries to participate in the digital economy. “For this, they need to proactively identify areas of inefficiency, and find the right tools to simplify and manage those processes.”

For example, to help their client restaurants proactively digitise different aspects of their operations, Oddle Eats partnered with Mastercard to transform critical business operations. These include implementing a secure payment solution as well as streamline and digitise key operational functions such as marketing and advertising, and delivery options.

Oddle Eats currently has 1,000 partners on board in Singapore and over 3,000 from overseas markets including Taiwan, Hong Kong, and Malaysia.

The digital factor

The digital economy also gave F&B players who have adopted digitalisation access to customer data, which has been a key driver for growth.

Goh said these have been especially useful for their restaurant partners who leveraged data insights to create better promotion bundles that appeal to customers.

“Most recently, noting that high delivery fees deterred customers from placing food orders, Oddle recommended a $5 island-wide delivery fee with a minimum spend for all its restaurant partners. Not only did this initiative see an increase in customer demand, but it also increased the basket size for restaurant partners, helping them capture orders which bring profitability,” Goh said.

Aside from data, the efficiency of online platforms. Businesses continued to leverage this, especially as consumers are largely familiar and highly receptive towards online food ordering.

According to Goh, During the first P2HA in May 2021, most of their restaurant partners have attained 70%-85% of their regular, pre-pandemic sales revenue, through online orders from Oddle.

Goh also emphasized how the prevalence of multiple payment options became an important foundation for F&B e-commerce, especially in hawker centres.

“The hawkers saw how this helped boost their business by allowing them to fulfil, not just in person, but also online orders. New payment technologies such as mobile payments, e-wallets, QR Codes, and contactless cards have boosted business-to-customer experiences with their range and flexibility of capabilities. As more people embrace online payments and options, it’s become more important now more than ever before to enable safe and secure payment gateway systems to minimize the risk of fraud,” Goh explained.

End of restrictions

In an announcement by the Multi-Ministry Taskforce on 10 August, it has eased its measures regarding dining in at restaurants.

Singapore has allowed dine-in for up to five vaccinated individuals at F&B establishments. Meanwhile, hawker centres and coffee shops have been allowed to accommodate up to two persons regardless of vaccination status.

Goh said he expects F&B e-commerce as dine-in resumes. However, basing on Oddle Eats’ 2021 performance report, F&B e-commerce should still typically account for 20%-30% of a restaurant business’ revenue.

“Humans are intrinsically social beings who enjoy a dining experience that offers more than just a mere meal. Quality, value, cleanliness, location, and staff are elements that contribute to engaging and memorable customer experiences and living in a pandemic simply means that consumers expect the same experience as they gather in smaller numbers, in compliance with government guidelines. F&B businesses must thus continue to engage consumers, whilst keeping up with an ordering system that’s efficient and a payment system that’s secure and seamless,” Goh added.

Goh said they foresee technology to play a key role in F&B operations to navigate through the changes on guidelines due to the pandemic or other unforeseen situations.

He stressed that despite an anticipated decrease in online traffic as measures ease, e-commerce will still remain a fast, effective, and efficient way to manage the business.

Goh said F&B operators should seize this chance to innovate instead of just reverting to business as usual.

“As F&B operators went in and out of lockdown, one thing was evident – businesses that had established close online relationships with consumers had a better understanding of what their audience wanted, and thus were prepared with enhanced branding and targeted digital marketing activities, compared to others. Thus, F&B operators should prioritize capturing consumer data, understand their value proposition and differentiation, and build on their brand to ensure the long-term sustainability of their business,” Goh added.

F&B industry in Singapore

Goh said that the F&B industry in Singapore has come a long way in its digitalisation journey. However, he stressed that there is more to be done.

“In addition to transforming business operations, businesses must know where their customers are, regardless of where they are physically located. This means that [F&B businesses] must be visible and easily searchable by customers, be it on food delivery apps, digital life services platforms, or a website. In fact, in the last month, Oddle Eats onboarded more than 200 new restaurants onto our platforms, building onto our existing restaurant base of more than 800 F&B businesses,” he added.

Additionally, Goh said Oddle Eats, through its collaborations with fintech partners, such as Mastercard, continues to support F&B operators as they embrace not only e-commerce but digitising business operations as well.