This article was first published on 24 April 2020 and has been updated with additional reporting.
While food delivery is not new in Singapore, strict safe distancing measures due to COVID-19 has accelerated consumer demand. At the same time, more food and beverage (F&B) establishments are also being onboarded food delivery platforms as they find it harder to cope.
This has also led to restaurants and hawkers having to manage a new cost for them – commission fees. Some of them 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.
To support the offline to online sales transition, the Food Delivery Booster Package was rolled out by Enterprise Singapore (ESG) to help reduce business costs of food delivery and sales.
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.
Encouraging F&B Operators To Offer Food Delivery
During the circuit breaker, support for businesses offering food delivery services was ramped up. This was rolled out in two packages, which lasted from 7 April 2020 to 31 July 2020. Note that this component of the package is now over.
In the first package, Enterprise Singapore funded 5 percentage points of commission costs charged by food delivery platforms – Bungkus, Chope, Deliveroo, foodpanda and GrabFood. 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.
In the second package, F&B businesses fulfilling food delivery orders via third-party platforms received 20% funding of the delivery costs.
Alongside ESG’s initiatives, banks have also made it easier for their F&B customers to connect to 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
Enterprise Singapore has also worked out a capability development pack valued at more than $1,500 for those who onboard with Deliveroo, foodpanda and GrabFood.
This helps F&B businesses in aspects of marketing, data analytics and improvement of online presence.
Capability Building: Businesses will learn to enhance online performances of their menus, 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 to promote products, run discounts and gain greater mindshare.
Data Analytics: Firms can access delivery performance reports, providing insights 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, including digital marketing and manpower 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.
Tap On The Digital Resilience Bonus For Up To $10,000 Payout
The Digital Resilience Bonus (DRB) targets two sectors – food services and retail. As these sectors are part of the most affected by COVID-19 and because they are consumer-facing, there is a greater urgency for these sectors to digitalise and adapt quickly.
To receive up to $10,000 in Digital Resilience Bonus payouts, F&B operators have to:
|F&B||Solutions To Adopt In Addition To PayNow And PEPPOL e-invoicing||Bonus Amount|
|Category 1||(i) Account, (ii) HR/Payroll and (iii) Digital Ordering (Dine in/Takeaway)||$2,500|
|Category 2||Online food delivery (via food delivery platforms or own online shopfront) or e-procurement||$2,500|
|Category 3||Data mining and analytics||$5,000|
There are more than 100 digital solutions available under The SMEs Go Digital programme. F&B businesses that adopt digital solutions not covered by any SMEs Go Digital or Enterprise Singapore’s grants will also be eligible for the Digital Resilience Bonus, as long as their solutions are pre-qualified by the Infocomm Media Development Authority (IMDA).
Enterprises that need assistance in adopting the pre-defined solutions so they can qualify for the Digital Resilience Bonus can approach their preferred local banks, including OCBC, SME Centres or SME Digital Tech Hub.
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