Food delivery company looks at ways to expand its reach
IN early 2014, Lai Wick Kee left his job at a market research firm to start a food delivery venture with a friend.
Perhaps, he had taken his interest in delivering food a little too seriously.
“I love food delivery,” says the 29-year-old enthusiastically. He offered no other explanation for his interest, nor, it seems, any was needed. It is what it is.
To kick things off, Lai and his partner, Chung Wen Chuan, started preparing food at home and delivered them to family and friends who were willing to support them and didn’t mind the convenience of having someone else prepare their meals.
Soon, they outgrew their home kitchen and the time came for them to decide: go big or go broke?
Lai decided to give “going big” a try.
So they roped in another partner and formed food delivery company Epic Fit Meals Co in mid-2014. They invested some RM500,000 to build a central kitchen in Damansara Perdana, Selangor and looked into plans to expand their operations.
Epic Fit Meals’ food concept, says Lai, is modelled after food he had enjoyed in Melbourne as a finance student.
“We took about six months to do research and development work. We experimented with various menus because, quite frankly, we didn’t know anything about F&B,” he says.
Chung was an engineer while Lai’s new partner was also from the finance industry.
They tweaked their standard operating procedures and pricing, learned to manage their storage and wastages and found a way to enable their kitchen to operate without a head chef.
By the end of that year, they were ready to deliver food to their customers.
“The food delivery market in Malaysia is educated by the pizza guys. They were the ones that started doing deliveries. So we thought we could latch onto that,” says Lai.
Although food delivery has become a staple in today’s F&B landscape, back then, Lai says there were not as many such players in the market.
“And of those, even fewer offer you a healthy food option,” he says.
But demand for healthier food was already on the rise then.
So while pizzas are on its menu, Epic Fit Meals also offers healthier options that are suitable for everyday meals. The company prepares its meals from scratch, including the sauces.
The focus on healthier food has given it a steady stream of business on weekdays.
However, Lai notes that its coverage is limited, which hinders it from growing very quickly, as is the case for most other startups doing food delivery today.
Unlike other players in the food delivery market, which either only provide third-party delivery services for other eateries or allow consumers to pre-order their food within a certain timeframe, Epic Fit Meals delivers food on-demand and within 45 minutes.
“So they make an order, either online or through the phone, and the order goes to the kitchen, gets prepared and is sent out straight for delivery. We don’t do batch orders,” he says.
Notably, their guarantee of 45 minutes delivery time means that they can only service consumers within a 5km radius from its outlet.
To increase their coverage, Epic Fit Meals added two more locations – Sunway and Mont Kiara – to cater to consumers around those areas.
The outlets also double up as a restaurant to cater to customers that prefer to dine in.
This business model is costly, admits Lai. Each outlet costs about RM500,000 to RM700,000 and only services a limited vicinity.
But it’s a price to pay to keep to the delivery time and to provide meals on-demand, he adds.
Nonetheless, he notes that having physical outlets does have its pros.
“Some people like seeing the physical store. It gives them more confidence in our business. They will dine in first and if they like it, they will come back and use the online platform for convenience,” he says.
Currently, about 30% of their customers are casual walk-ins.
Apart from the high cost of expansion, another challenge that Epic Fit Meals faces is maintaining its team of riders.
Lai says one of the challenges faced by the team in the early days was juggling logistics.
“Initially, we outsourced the delivery. We prepared the meals and let someone else deliver. But that was a disaster. It was a bad experience. So, never again,” he says vehemently, visibly affected by the no-shows of the third-party riders.
This led to the team deciding to control the whole value chain, from the taking in of orders, to the food preparation and right up to the delivery of orders.
“But because we have our own full-time riders, we have to deal with people poaching our riders. Getting good riders is a challenge for the industry,” he explains.
The company hires locals to reduce human resource challenges and to ensure quality service for its customers. It currently has 39 employees.
Lai says the company is operationally profitable but the high capital expenditure is an issue it needs to address to expand.
“We’ve opened three outlets on our own. We will probably take the next one year to digest and maximise what we have.
“We will look at raising funds next year, either through private investors or the Leap market. But we don’t just want money, we want ‘smart money’ or investors that can add value to the business,” says Lai.
Alternatively, the company may explore joint venture or licensing opportunities.
Lai hopes to raise some RM5mil to open four to five more outlets.
In five years, he hopes they would have built up enough capacity to service the whole of Klang Valley.
His ultimate goal for Epic Fit Meals is to be the next Domino’s Pizza.
Domino’s, he says, has got the food delivery business down pat.
His eyes are trained on the delivery chain giant.
Where they go, there he will go also, he jests.
And Lai believes the way to get to where he wants to be is to keep learning and improving along the way. He thinks his passion for food delivery can get them through whatever challenges that come their way.
“This has been a humbling experience. We are constantly learning from the big boys and we benchmark ourselves against established restaurants.
“Delivery is not a sexy business. We have to keep persisting, one meal at a time,” he says.