In Novosibirsk are actively developing food delivery services, among which major players are “Yandex. Food” and Delivery Club. It is difficult to compete, so only some institutions still resist and leave their delivery in town. The rest were forced to surrender — some even closed their own service delivery. Journalist NGS. The BUSINESS learned from the market, why they consider the aggregators parasites, what Commission have to pay cafés and restaurants, why do they still connect to these services and what future they predict in three to five years.
According to “Yandex. Food” in Novosibirsk with them, it has about 400 restaurants. In December last year, the company announced that all through the service was delivered more than 1 million orders. The second major player in the market, Delivery Club, a lower — according to the press service of the company, more than 70 establishments, including Burger King and KFC, working with them in Novosibirsk. Overall turnover for Delivery in 2018 increased by 48 per cent to 1.9 billion, in 2019 the company plans to double growth the past year.
The General Director “Yandex. Food” Maxim Firsov believes that in the future will continue the transition to the high proportion of retail online — this applies to all FoodTech in Russia. He was confident that the segment of the food delivery is actively growing and will continue to grow in the next three years.
“The set of products for cooking, dinners by subscription, vending will continue to actively develop, and deliver food while in early development, but it is potentially very large market. If in 2018 the share of aggregators in the segment of food delivery in Russia, according to our estimates, amounted to only 15-17%, then in 2022 they can increase it to 55-60%,” — said Maxim Firsov.
The same trends noted and managing partner at Delivery Club Ruslan Gafurov. He says that in Russia there is a transformation of consumer behaviour: “food delivery service for them is not so much a way to organize a party, how many daily tool to save time. We call this process culture shift. Similar changes have occurred in China, the inhabitants of which as well as the Russians, initially conservative and prefer to cook at home. But today for the new generation of Chinese consumers homemade food was in fact elitist. We expect similar changes in Russia in the next four years.”
Ruslan Gafurov says that culture shift has already occurred in Moscow and St. Petersburg, and the next wave of change needs to affect other cities, including Novosibirsk.
Despite these processes, in Novosibirsk remain a few institutions that retain their own shipping, such as “Make Sushi”, which is included in the criminal code “Meykers Groups.” However, in Moscow and Yaroslavl in the network is not their delivery, they use only Delivery Club. General Director UK “Meykers Groups” Dmitry Tuft says that in Novosibirsk there is no need, because there are about 50 points and they can deliver the food yourself — it’s a question of speed and logistics and Delivery may not provide the level of logistics that they need, according to the company.
“These aggregators, by and large, develop the market delivery. With them it is almost impossible to compete with a weaker player for one simple reason — no Delivery, no “Yandex” has no goal to earn money in the short term. “Make sushi” is a commercial organization, and they are now working on market share. They do not care what profitability: they flood their customers with crazy offers, discount and so on. They are fighting among themselves. Many companies come to them, but you get the mindless slaughter in the app except for you and another 40 competitors — who choose, not clear,” says Tuft.
Dmitry Tuft believes that the use of “Yandex” and Delivery of profitable restaurants that have one location in the city centre: they don’t need to bother with the call-center and couriers. To imagine that a restaurant of the centre he would have carried food in Akademgorodok, unrealistic, he says. Another project of the Tuft — “Ichiban” is just located in the city centre, it makes sense to do the delivery there, so they work with Delivery.
“Now what will happen: the retail price will be stable — conditionally 100 rubles, and to justify the Commission, the cost of goods in the delivery is significantly more expensive, though the shipping is, relatively speaking, free. Shipping is in any case any additional costs, so either you get paid, but it now is not fashionable, it was fashionable five years ago, or you slightly adjust the price. Either you did not adjust the price, and just struggling to capture the market as Delivery and “Yandex”: we don’t care how much we earn today, but we switch all the regional operators, then we can earn money from them in large numbers, when other alternatives will not. This is the future — 3-5 years”, — considers Dmitry Tuft.
Founder Potehin Pizza Vitaly Turuntaev has maintained its delivery and connected to “Yandex. Food”, and will soon connect to Delivery. Potehin Pizza two years there in Krasnoobsk, so there are two regular runners, and in Novosibirsk, the point opened recently, so on weekdays he uses the delivery services that provide their couriers or is able to deliver the orders himself, and on the weekends work their couriers.
“People have a herd mentality: powerful advertising comes from “Yandex”, at Delivery, so more and more people make orders from these platforms, although if they ordered directly from the manufacturer, in this case I have, that would be a bonus system, permanent promotions, discounts. I try and make the prices lower, and more than any fishechek to push, but the people are interesting to use these platforms. And I as a manufacturer is not very much and wanted to work through them because they charge crazy interest. If I deliver the order, sold through his site, I would earn, and so, it turns out, all the profits we give them. The only reason I do that is extra is that I saw there, and in the hope that next time will not order through Yandex or Delivery, directly through me,” says Vitaly Turuntaev.
According to him, “Yandex” takes 30 or 33% assuming that will be their courier, but he goes for the nearest distance to 3 kilometers.
“I put through “Yandex” to sell pizza, because it is more cheat — can you afford to sell through them, but if I’m going to sell the rolls, a part of the position I will be in minus, even in zero not worked,” says the entrepreneur.
Restaurateur Vyacheslav Yakovlev confirmed that the use of these services is not profitable, but they treat this not as a way to make money, and as essentially free advertising. For example, “Mamin Sibiryak” and Kung Pho is located on Delivery. Yakovlev told journalists NGS that they are now preparing to launch its own delivery for schools of Kung Pho and “dim sum Bao”.
CEO pizza “Papa Carlo” Denis Mateev that uses only its delivery, confirms that they have their difficulties, however, the aggregator does not want to connect, but is considering the idea to give delivery to outsourcing to other companies with the couriers.
“I believe that aggregators are parasitic on the restaurants: they do nothing, produce nothing. Restaurant this delivery, in fact, earns. They enjoy the fact that people do not have their own delivery services, and offer a very high percentage — about 35%. And what 35%? For us it is not a realistic percentage, because it costs high. We do not sell a cheese product, which costs 5 rubles for 500. We have products of high quality. We cannot afford such pay interest to the aggregators,” — said General Director of pizzerias “Papa Carlo” Denis Mateev.
Moreover, he notes that these services are lured to their sites of their clients.
“Switch them, agree with some, companies with no sales, make them discounts of 20-30%. A man walks in “Yandex” or Delivery, and sees that some obscure company makes a 30% discount on your food. Some people think: “Oh, cool!”, and do not order from us, and at this company. And plus I see for those who have just opened the who need at least one order to do that, because no well-established customers. For giants, such as KFC, McDonald’s — Federal multi-brand network, which is service delivery,” says Denis Mateev.
He adds that such institutions have nothing to lose because doing the flow, and thinks that “Yandex” and Delivery make a Commission for them, not 35%, and the minimum —10–15%, because I want to work with them for advertising.
“I believe that in my company we too have worked long and hard to conquer his guest, then to take all these developments, the conquest just to give “Yandex” and it is his money to pay. I believe that we produce a quality product, and don’t want to mix with those companies that are aggregators,” concluded Mataev.
In the future, he believes, will still be a few players on the delivery market, at least two, then there will not be monopolies.
“As Apple and Samsung all each other motivate. More and more companies will connect to them because I hope they will do an adequate price. I call for cooperation, but on normal conditions that will be beneficial to all,” urges Denis Mateev.
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