Deliveroo’s ‘virtual restaurants’ number set to double by year’s end

The ranks of food-delivery service Deliveroo’s ‘virtual restaurants’ are set to double by the end of this year as the concept catches on with local restaurateurs. 

Deliveroo has built a roster of more than 100 virtual brands across the platform in Hong Kong, and will have 200 by Christmas.

The concept, which includes those operating from delivery-only Editions restaurants, allows restaurant operators to test new concepts, menu items and even brands via the Deliveroo app, without creating standalone restaurants. For Deliveroo, it offers an exclusive range of dining options no other delivery service – or physical restaurant – can offer. 

Deliveroo says that since the inception of virtual brands in January, it has seen web and app traffic from prospective customers to those brands jump by 800 per cent. Sales per store of virtual brands have also increased threefold since the beginning of the year.

Besides testing the market for new concepts, Deliveroo’s ‘virtual restaurants’ allow existing eateries to improve productivity and efficiency of existing kitchen staff and chefs, save on food costs and cut wastage without increasing any fixed costs such as rent and other operating costs.

Deliveroo works closely with partners to create each virtual brand, starting with big data, which is used to identify hotspots for growth, areas with high customer demand that are being underserviced with missing cuisine types, unsuitable price points, or a lack of restaurants in general. That data is then used to guide the creation of an optimal menu from layout to pricing recommendations and featured items, all designed to help restaurants leverage existing ingredients and under-used kitchen space. After a strong quality control process, Deliveroo also provides marketing support through online and offline channels, sponsored promos and discounts, and post-launch diagnostics of customer behavior towards the brand, not to mention partners getting access to Deliveroo’s global network, with opportunities to source cheaper packaging or food ingredients, learn new recipes, or even license foreign brands.

In markets around the world, restaurants on Deliveroo that launched virtual brands with the company have seen on average a 70-per-cent increase in revenues as a result of those brands.

In Hong Kong, where Deliveroo has more than 60 per cent market share in the food-delivery sector, this is higher at 85 per cent.

“Deliveroo’s ‘virtual restaurants’ mean more great food for our customers,” said Deliveroo Hong Kong GM Brian Lo. “By creating new brands out of existing kitchens, restaurants can really boost their business and try new ideas without the need for expensive new premises. At Deliveroo we are using our knowledge, data and insight to help restaurants launch new brands in Deliveroo Editions and from their high street kitchens. We work with chefs every step of the way to make virtual restaurants a success from concept to delivery. The end result is great for restaurants and is helping to increase customer choice across Hong Kong.”

There are 18 virtual brands at Editions sites in Hong Kong, with nine in Wan Chai and nine in Sai Ying Pun.

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