Grab shakes up F&B market with cloud kitchen concept

A cloud kitchen concept sees several merchants working under one roof

It usually takes time and effort to open a brick-and-mortar restaurant as owners take into account factors including location, parking lot, tables and chairs, and even feng shui. Nowadays, with the prevalence of the online food business, owners can earn revenues up to tens of millions of VND per day without opening a large restaurant in a prime location. To attract customers, they promote their business on social networking sites like Facebook and Instagram.

The competitive landscape has been shifting impressively in the last year, with the fast-paced development of online food ordering platforms like GrabFood, Now, and GoFood. The increase in online ordering in Vietnam has created openings for new kinds of online food businesses, where the owners do not need to invest heavily in location and staff.

The recent launch of cloud kitchens has ramped the game up to a new level. GrabFood has launched Vietnam’s first GrabKitchen, where multiple merchants co-exist in one location. Under the cloud kitchen concept, shared cooking space with a ventilation system is set aside for local food merchants that make income from food sales through delivery. With this concept, the merchants can enjoy the five “No’s” – no business premises, no construction, no marketing, no deliveries, and no regional gap. With investment and support from Grab, small vendors do not need to worry about renting space, thereby lowering the operating expenses. GrabKitchen is a truly plug-and-play model where infrastructure is well equipped and merchants are onboard for a relatively low cost.

In addition, Grab also helps ease marketing efforts for local merchants by providing access to millions of customers on GrabFood. Meanwhile, with the huge fleet of drivers, Grab can offer fast delivery to more customers.

Last but not least, GrabKitchen also closes the regional gap as merchants offer endless variety across northern, central, and southern cuisines.

Phuong Mai, owner of Rio office lunches said, “GrabKitchen brings a lot of convenience and comfort to local merchants. We do not need to worry about business premise, facilities and processing areas, as well as customer base. Therefore, we have more time to focus on what we do best – prepare and cook food.

Grab has set some standards and requirements for local merchants to ensure the best products and services for customers. Using data analysis, Grab pinpoints a location that has a supply and demand gap. Thu Duc district is a place of great demand because of its young demographic and high population of students and workers. In addition, to join the cloud kitchen, merchants need to generate high sales on the GrabFood platform. As a result, these merchants can expand their reach to the location while customers can get their favourite food delivered faster.

“Some of my favourite brands are quite far from where I live so I remain hesitant to order food online,” said Ngoc Mai, a student in Thu Duc district. “Sometimes delivery fees are even higher than the meal price. Now with the opening of a nearby GrabKitchen, I can freely choose and easily combine main dishes and snacks in one single order and it only takes 10 minutes with reasonable delivery costs.”

Another crucial factor for the cloud kitchen lies in the food safety issue. This requires the efforts of both local merchants and Grab. GrabKitchen is designed with size and layout allow for safe working practices, walls protect against the build-up of dirt, grease interceptors, separate exhaust system provided. Grab requires its merchant partners to obtain food safety and hygiene certificates issued by local authorities. Grab will also send staff to supervise implementation of food safety and hygiene standards in the kitchen. As food safety and hygiene standards are secured, GrabKitchen can offer customers the quality meals they expect.

GrabFood driver T. Nghi shared that sometimes customers are amazed by the fast delivery. He used to take up to 30 minutes to get the food from nearby districts to customer homes in Thu Duc district. Now, it only takes five minutes for food delivery around the area thanks to the openning of GrabKitchen.

According to industry insiders, GrabKitchen will make a strong impact on the online food ordering segment. The shared kitchen will become a ideal platform for merchants, drivers, and customers. “The shared kitchen model presents both advantages and disadvantages,” one expert said. “Some of the biggest pain points are maintaining quality, and controlling food hygiene and safety. With a strict operation, the shared kitchen model not only brings much convenience for users, but it also explores the new potential of the Vietnamese culinary scene.”