Door2Door looks to the future

Six years after launching Yangon Door2Door online food ordering and delivery service in 2013, Shady Ramadan is thinking big. With the business thriving in Yangon and Mandalay, it expects to turn a profit this year, and plans are afoot for a mobile application to provide same-day pick-up and delivery of everything from groceries to documents.

The new app, Sonic, is being developed in response to rising demand for convenience and speed. Customers now have to wait at least a day for groceries to be delivered, and a few days for the pick-up and delivery of packages or documents. But people don’t want to wait.

“People are busy. They want instant gratification. If you can only deliver something within three days, people are prone to change their minds. If I know something is coming to me within hours, there is less time to change my mind,” Shady said in a recent interview.

“It doesn’t matter what we deliver – we need good logistics and technology that guarantees fast delivery. We need to give people the option to pay more for same-day delivery because customer trends and expectations are changing. This is how I am pushing Sonic,” he said.

Shady’s observations stem from current trends at Door2Door, which recently expanded beyond restaurant deliveries to include grocery items, like honey and yogurt, flowers and wine.

“There are people who need flowers delivered on the same day for last-minute events or for an anniversary they forgot. And demand has risen since we included the option to buy wine from shops like Apex Gourmet and Wine Cellar in August. We now have customers who order wine from us every day,” Shady said.

Based on this trend, there is room for a mobile service that guarantees delivery in an average of two hours. Shady is in discussions with local retailers and wholesalers to form partnerships under which groceries can be delivered reliably to customers.

Seeking reliable partners

“The challenge for us now is we need vendors who will fulfil our needs. For example, we don’t want to commit to delivering groceries without a reliable partnership that guarantees us access to the goods. For Door2Door, all 500 restaurants and vendors have partnership contracts with us,” he said.

Yangon Door2Door started out in 2013 with four partners and funding from investors like BOD Tech Ventures. With revenue expected to double to US$4 million (K6.13 billion) this year compared to last year, the firm will turn a profit for the first time.

“Business was slow in the beginning because we started with higher-end restaurants like Coriander Leaf, Yangon Bake House, Linkage and Union Bar. The perception was that we were expensive and only catered to the expat crowd. But we started to add more variety and cheaper stores, and now we have more than 500 restaurants and partners despite competition from other delivery services, like Food2U,” Shady said.

He said that 80 percent of Door2Door’s orders are from repeat customers. “That is great because it shows stickiness and that it has become a lifestyle,” Shady said, adding that the firm has been able to mine large volumes of data to reveal interesting details. For example, pizza and Indian food are the most popular orders in Yangon, with 20 such restaurants accounting for about 40pc of the region’s sales.

He said that 60pc of Door2Door’s customers are local, and each customer spends an average of K15,000. “Our expatriate customers help us achieve that average, which helps us cover costs. We can do this by adding more vendors, which gives the customer more choices,” said Shady.

Thinking outside the box

Recently, Door2Door introduced a club subscription package, which allows unlimited orders with free delivery to 24 townships in Yangon. “This has been appealing to companies, because it enables them to order in bulk. We also promote shops that offer biodegradable packaging and cutlery options,” Shady said.

Door2Door takes a 10-25pc cut of the prices that restaurants charge, depending on their exclusivity with Door2Door and whether the delivery fees are passed on to the customer. “If the restaurants absorb the delivery fee to encourage more sales, we can make it free delivery but the restaurant pays a higher percentage,” he said.

Door2Door now has 100 couriers, who deliver an average of 12 orders a day. Each courier is paid a salary plus a fixed amount for each delivery. Insurance is provided.

Door2Door is working with payment service providers like WaveMoney, Visa and KBZPay to widen the payment options available to customers. For now, 85pc pay by cash while the remaining 15pc pay by card online.

There are plans to expand Door2Door online food delivery to other states and regions, including the administrative capital Nay Pyi Taw by year end.

Shady says the business will keep expanding and ultimately find international investors. “So far we have had two rounds of funding, with the most recent being last year from a local investor. We are trying to find regional or international investors, as we need more overseas expertise and know-how to grow,” he said.

Source: Myanmar Times

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