The COVID-19 crisis sparked a roller coaster ride for Malaysia’s food and beverage (F&B) industry. At the peak of the global pandemic, Movement Control Orders (MCO) saw dining a restricted activity in Malaysia. While this has since loosened, the food supply chain was severely affected due to Malaysian states requiring time to fully open up. This disruption in food supply chains, coupled with other external global forces and high demand for food delivery services, meant the Malaysian F&B sector has been in a precarious economic situation, with about 40% of SMEs that declared they might close in 2021.
However, the future looks more promising with the government’s new 12 Malaysian Plan pushing for digitalisation and initiating plans to grow the economy, including the F&B sector. So, if you are planning to expand your business to Malaysia or start afresh there, here are three things to take note of:
- Food delivery services are here to stay
While COVID-19 and MCO restrictions have contributed substantially to the growth of grocery and food delivery services, this service sector is set to continue growing. Statista reports that revenue in the Online Food Delivery market is projected to reach US$2.10bn in 2022 and a projected market volume of US$4.46bn by 2027.
These numbers reflect the need for restaurant and cafe owners to continue offering food delivery services, even as dining-in resumes. Malaysia’s top food delivery choice is FoodPanda, with 81% of consumers opting to order food through the platform. This is followed by GrabFood and other smaller, local players such as Beep Delivery and Air Asia.
If you’re a restaurant or cafe in Malaysia, it’s time to switch to a smart POS that offers FoodPanda and GrabFood integration. Instead of operating separate devices from various delivery partners, you can use one Qashier smart POS terminal to accept and manage orders, receive payments, and sync your offline and online menus, as well as send order chits straight to your kitchen once you’ve accepted them.
- New adaptive business models: cloud kitchen
Another rising trend in Malaysia are cloud kitchens. These are kitchen spaces without dining in areas, built to prepare meals in a central location, often with multiple restaurants concurrently operating within them.
A business model pioneered by Deliveroo, the shared-kitchen spaces allow chefs to cook without sustaining any rental cost of maintaining a dining area. You can see the attraction: no seated customers mean no service staff and lower electricity bills. Therefore, many F&B startups and even established chain stores, like KyoChon, have adopted this innovative business model.
As a new or existing F&B owner, it may be cost-effective to consider using a dark kitchen like the ones offered by GrabFood. You can focus solely on maintaining the quality of your food and delivery services. Although customer loyalty primarily lies with the food company and not the delivery services they use, part of increasing customer return rate is also providing delivery services focused on quality and customer care. A cloud kitchen allows small startups the flexibility of cooking and delivering food independently, even mobilising payments on the go with smart POS systems. That way, it eases workforce costs.
- Increased digitalisation of businesses, including e payments
The Malaysian government has laid out clear plans to boost F&B with digitalisation. This is fuelled by the growth in reported e-commerce transactions, jumping by RM71.7 billion to RM268 billion in the second quarter of 2021 (Q2 2021).
In the same report, Minister in the Prime Minister’s Department (Economy) Datuk Seri Mustapa Mohamed had noted the growth of micro, small and medium enterprises (MSMEs). As a result, the government has allocated RM200 million for the MSMEs Digitalisation Grant scheme to support digitalisation. The goal is to achieve at least 90% of over 800,000 local MSMEs attaining digitalisation efficiency.
Digitalisation includes payments with e-wallets on a mobile phone, and the competition has certainly heated up in Malaysia. Due to the convenience of touchless payments, e-payments such as GrabPay, Touch N Go, Boost and other new players have entered the market. The ease and convenience mean it’s gaining popularity even in rural areas. It’s crucial that F&B players also innovate and digitalise their payments, allowing people to tap and pay for their food.
Apart from that, buy now, pay later (BNPL) providers are experiencing strong growth in Malaysia. However, they have been scrutinised for encouraging young customers to spend money they don’t necessarily have. This poses a challenge for BPNL, which must operate according to Islamic financial guidelines or risk losing its Muslim market share. But BPNL providers such as Atome have adapted efficiently to the Malaysian markets. For instance, Atome has added a Malay language feature and launched an iBNPL partnership with PayHalal. PayHalal is a Syariah-compliant payment gateway that permits riba-free, 0% interest payment.
Digitalisation for F&B players
For F&B players that want to continue growing business revenue in a challenging economy, digitalisation is inevitable. Choosing the right technology can help business owners optimise operations, use resources efficiently, and increase sales and profit. If you are planning to expand your business to Malaysia or are a local operator, you’ll need to partner with a vendor that knows the market well.
Qashier’s smart POS presents an integrated solution to meet all kinds of business needs with multiple digital solutions, including QR code payments, employee management, customer relationship management (loyalty programs), inventory management, data analytics, cashless payments, all-in-one terminal.
Qashier promises a seamless setup within 10 minutes without needing technical expertise. It boasts a user-friendly interface that is simple for anyone to learn and use. In addition, you’ll find 7-days-a-week responsive technical support if you require assistance from our friendly Qashier team.
Speak to us to see if Qashier’s Smart POS can meet your business needs. Find out how Qashier’s Smart POS can meet your business needs. Schedule a meeting with us here, call us at (+65) 3165 0155, WhatsApp (+65) 8882 8912, or email [email protected].