Cloud Kitchens, GrabKitchen and DishServe, exit Indonesia
Cloud Kitchens, GrabKitchen and DishServe, exit Indonesia
Indonesia’s cloud kitchen scene undergoes massive changes as high-profile competitors, including GrabKitchen and DishServe, go out of business.
Last year, in December, GrabKitchen, one of the known brands of the cloud kitchen industry in Indonesia, decided to say goodbye to its branches located in the Jabodetabeks and Surabaya as well as Bali. It was this move that followed the company’s concerns of slow-growth and a direction towards light asset businesses. Forty-eight kitchens were closed altogether, creating a vacuum in the industry.
This despite the fact that this kind of development has presented chances for small business ventures related to cloud kitchens have become commonplace.
The bigger cloud kitchens left a gap in the market, which the smaller-scale businesses seized.
GoTo group focuses on improving its food delivery business
Following the shutdown of its cooking station, Go-To group (GoJek’s parent body) will emphasize on the boom of the food business where GoFood will be the pillar strategy in Indonesia.
Nico Japad, the founder and CEO of Portale, pointed out that some of the shut downs of the big scale cloud kitchen operations might have been due to quick and ineffective growth.
The kitchens that worked with these platforms often did not generate profits.
The commissions charged by online food delivery platforms were substantial, and there was almost nothing left for the sellers after paying the cloud kitchens’ commissions.
A reality check?
Many of the tenants are leaving the cloud kitchen industry in Indonesia due to excessive charges by operators. Some startups are developing alternative strategies for operating in the limited profit margin industry even as others try to adjust their models towards servicing food and beverage MSMEs.
Cloud kitchen owners are changing their model of doing business in order for the food and beverage MSMEs to find them more attractive.
This should reduce rents and help resuscitate and transform the Indonesian cloud kitchen market.
Smaller operators are also taking up this challenge and aiming to succeed where their big competitors have failed to do so, showing that even the oil industry is not immune and can also change.
