Hong Kong food-delivery service Deliveroo has doubled the ranks of virtual restaurants supplying meals through its platform to 200.
Virtual brands are concepts developed by existing restaurant operators to trial new menu collections or options not available in physical stores, available only through the Deliveroo app. Examples include a Greek restaurant offering healthy protein bowls, or a pizza outlet delivering wraps.
Brian Lo, GM of Deliveroo Hong Kong, says in other international markets, restaurants launching virtual brands on Deliveroo have seen an average a 70-per-cent increase in sales as a result.
“In Hong Kong this is higher at 85 per cent, thanks to the city’s enthusiasm towards ordering in and eagerness to try new things.”
At a time when the number of physical restaurants in Hong Kong has fallen by between 1.5 per cent and 5 per cent due to falling footfall since January, virtual brands offer an opportunity to recover lost ground – all without the overheads of a physical store.
Deliveroo encourages the development of virtual brands by using its data to identify hotspots for growth and cuisine types which might be missing in some neighbourhoods. Lo says the company also helps by offering strong marketing support, access to its global network for more cost-effective ingredient sourcing and new recipes, and the chance to license foreign brands.
One successful virtual brand Deliveroo has fostered in Hong Kong is Caramba Mexican Cantina, owned by Eclipse Hospitality Group. Caramba was a popular restaurant in Soho for 16 years until rising rents and competition forced it to close its doors in 2016.
Deliveroo encouraged Eclipse, which also owns Cafe Siam in Lan Kwai Fong, to revive Caramba as a virtual brand because there was a space in the market for Mexican cuisine in Central. Since launching on the app in November, the company’s revenue has grown four-fold.
“We’re grateful to Deliveroo for coming to us with their expertise and advising us to bring back a part of our history we thought we had to say goodbye to for good,” said William Chan, marketing manager at Eclipse. “The food industry may be changing rapidly but it’s for the better, and bringing back Caramba is a sure sign of it.”