With a handful of restaurants and hawkers grappling with high commission fees, some have taken to social media to call for lower commission rates. Two Members of Parliament (MPs) and industry groups such as the Restaurant Association of Singapore (RAS) have also voiced concerns that such charges are “too exorbitant” for hawkers.
Amidst the buzz, some of us might have overlooked the Food Delivery Booster Package rolled out by Enterprise Singapore (ESG) to help reduce business costs of operating on food delivery platforms. The participating food delivery platforms are Deliveroo, foodpanda and GrabFood, for the period between 7 April and 4 May this year.
This package is available to new entrants, as well as those who are already operating on the platform. Eligible F&B businesses are those selling food that was prepared on-premise for immediate consumption, be it smaller establishments like hawker stalls and cafes, or larger operators such as food caterers or restaurants.
There is no minimum requirement for food delivery transactions to qualify.
Funding For 5 Percentage Points Of Commissions Charged By Food Delivery Platforms
Enterprise Singapore will fund 5 percentage points of commission costs charged by participating food delivery platforms. Currently, these platforms charge a commission of 20 to 40% for regular deliveries. On Grab’s website, it states that all GrabFood orders are subject to a 30% service fee.
For example, if the current commission is 25%, ESG will reduce costs to 20%. This grant support will be reflected in reduced fees charged by the food delivery platform.
Funding Of 20% Of Delivery Costs Through Third-Party Logistics Partners
For F&B businesses that are fulfilling food delivery orders instead, Enterprise Singapore will fund 20% of the delivery costs. This applies for orders made between 7 April and 4 May, with eligible third party logistics players such as Lalamove and Zeek.
The funding will be automatically disbursed in the form of lower delivery costs, which means that you will only pay 80% of the original cost to the logistics partner.
Alongside ESG’s initiatives, banks have also taken the initiative to make it easier for their F&B customers to tap on logistics partners. For example, OCBC has teamed up with Butleric to make onboarding on the platform hassle-free and with preferential rates.
Optimising Sales With Capability Development Pack
For those who are on-board with Deliveroo, foodpanda and GrabFood, Enterprise Singapore has rolled out a capability development pack valued at more than $1,500.
This helps F&B businesses in aspects of marketing, data analytics and improvement of online presence.
Capability Building: Businesses will learn to develop appropriate pricing structures or to run promotions and bundle deals effectively.
Marketing: Companies will get to tap onto the platforms’ assets such as advertisements and online banners.
Data Analytics: Firms can access delivery performance reports, providing insight such as volume of sales and orders, average delivery and food preparation, and customer profile.
The food delivery platforms will also provide varying forms of onboarding support, such as waiver of onboarding fee, free product photography, or waiver of first month commission.
Eligible F&B businesses include those with a food shop or food stall license issued by the Singapore Food Agency and sell food that is prepared on-premise for immediate consumption.
The capability development pack will cost F&B firms a nominal fee of $100 and lasts for a year, from the date of application.
Applications are open from 13 April to 31 December 2020, on a first-come-first-served limited basis. Interested F&B businesses can head to the partner platforms directly to sign up: Deliveroo, foodpanda and GrabFood.
Up To 90% Subsidy For F&B Businesses To Go Digital
To encourage F&B businesses to build their online presence, Enterprise Singapore will fund an enhanced amount of up to 90% of eligible costs through the Enterprise Development Grant.
To qualify, F&B businesses must be registered and operating in Singapore and have a minimum of 30% local shareholding. You must also be in a financially viable position to start and complete the project, of which you will submit relevant documents such as your latest financial statements.
To get up to 90% subsidy in eligible costs, businesses have to focus on either creating a virtual brand, or to develop an online to offline (O2O) strategy.
Virtual Brands: According to ESG, virtual brands refer to an online-only concept that leverages on your existing capacity, branching off from your core brand. The idea is that virtual brands can bring in an additional revenue stream, by attracting new customer segments. Labour and rental costs are also significantly lower.
O2O Strategies: While food delivery platforms provide access to a large customer base, it is also important for companies to build their own channels to engage with customers. One common way is by collecting and analysing customer data to use for marketing or sales purpose in future, such as to provide more personalised promotions.
To tap on such support, businesses should apply for the Enterprise Development Grant on the Business Grant Portal from 9 April to 31 December 2020.
Stay Healthy, Go Digital
Keep your workers and business healthy during this period by going digital. In partnership with IMDA Go Digital Initiative, understand how OCBC digital solutions can help your business buy, sell and operate better during this time.
Join The DollarsAndSense Business Community
For more content that helps entrepreneurs, freelancers, and self-employed individuals and learn to build better businesses, join the DollarsAndSense Business Community on Facebook.