I had a chance to speak with Jonathan Weins of Dah Makan, a food delivery (lunch and dinner) subscription startup based in Klang Valley in Malaysia. I chose this company because I am curious about how food delivery startups work in Southeast Asia, given the prevalence of cheap street food and the variety of low-cost healthy options as well as the relatively relaxed regulatory environment. Their goal is to become the Seamless or SpoonRocket of Kuala Lumpur.
Both of the founders, Jess and Jon, had worked in food delivery before in the equivalent of Seamless in Hong Kong. In their BD roles, they realized that Malaysia was an untapped market so they left their previous jobs to take this business to Malaysia. The team has previous experience in the industry and are able to bring their know-how with them to a new geography without fierce competition.
Dah Makan is an example of effectiveness because they have taken a proven business model of B2C food delivery for office workers and adapted the operating model to best fit the unique business and cultural environment of urbanites in Malaysia. Their business model d operating model are well aligned for the following reasons:
- The food delivery business model can be done by almost any restaurant, yet by choosing an operating model with no physical restaurant and only online ordering, they are able to lower costs and better harness customer demand given the increased wait time between order placement and delivery in comparison to eat-in restaurants. They can afford to hire Executive Chef Samsul which improves the quality of their offerings and helps them target a more sophisticated audience.
- Their business model offers a variety of multicultural dishes that changes on a daily basis and they operate in multiple industrial sized kitchens makes this possible, whereas a regular restaurant would have trouble serving up a variety of dishes with an ever changing menu. This gives them a distinctive advantage as a high-end online cantine that is convenient, nutritious, and well-priced (4-5 USD per dish). This significantly increases demand and improves financial performance since customers can eat Dah Makan food every day knowing they will have new choices, much like eating at a reasonably priced local bistro with daily specials.
- This business model is well suited for developing economies such as Kuala Lumpur where local restaurants are not of the same standard and quality as Dah Makan so they can easily stand out, and their operating model allows them to take advantage of relaxed regulatory environments and initially start cooking in their own kitchens for the first year of operations.
Customers order through the website at http://dahmakan.com/ after logging into an existing account or creating one if they are a first time user. The client leaves their contact information, including email, delivery address, and contact number, and pay cash to the delivery person when the food arrives. It is unclear whether other payment options are currently available or whether cash is the preferred method of payment. This flexibility gives them an advantage because they don’t force users to leave their credit card information and the service and easy to use and frictionless. The amount of data each customer leaves behind allows Dah Makan to do a significant amount of analysis on their customer base and their preferences.
There is a two hour window for food delivery, between 11:30am and 1:30pm on the day. The delivery person contacts the customer when they are within the vicinity of the area. The one and a half hour window between the ordering deadline and the delivery time gives Dah Makan ample time to predict the demand for the dishes so they don’t under or over stock certain items. They list certain items as sold out allows them to control the maximum quantity of certain dishes so they are in control of the demand. Replacing a physical store with online ordering reduces their capital expenditures and overhead expenses since they only need to rent the industrial kitchens and don’t need as additional staff to operate a restaurant.
They now operate out of commercial and fully licensed kitchens. Dah Makan is a registered brand by Farm to Fork Sdn Bhd and all of the meats are from hala-certified suppliers. The menu is designed by Executive Chef Shamsul. Jon told me that they cooked in their own kitchens for their initial one hundred plus customers, and only one year after operations, they have expanded to three industrial size kitchens. The lack of regulations surrounding food and food safety really worked in their favor so they were able to get business started initially without enormous capital expenditures.
Interview with founder Jonathan Weins on November 1st, 2015
All images from Dah Makan website