Now reading:

ESG Food Delivery Booster Package: Subsidies for F&B stalls to use food delivery platforms and logistics partners

ESG Food Delivery Booster Package: Subsidies for F&B stalls to use food delivery platforms and logistics partners

  • 08 September 2020
  • By Cheryl Heng
  • 5 mins read

This article was first published on 24 April 2020 and has been updated with additional reporting.

While food delivery is not new in Singapore, the strict safe distancing measures have since accelerated consumer demand. At the same time, more F&B establishments are also onboarding food delivery platforms to help cope with COVID-19.

This has led to restaurants and hawkers having to manage a new cost – commission fees. Some of them have taken to social media to call for lower commission rates. Two Members of Parliament (MPs) and industry groups such as the Restaurant Association of Singapore (RAS) have also voiced concerns that such charges are “too exorbitant” for hawkers.

To support this offline to online sales transition, the Food Delivery Booster Package was rolled out by Enterprise Singapore (ESG) to help reduce business costs for food delivery and sales.

To be eligible for this package, F&B businesses must sell food that is prepared on-premise for immediate consumption. This applies for smaller establishments like hawker stalls and cafes as well as larger operators such as food caterers and restaurants.

Encouraging F&B operators to offer food delivery

During the circuit breaker period, financial support for businesses offering food delivery services had ramped up. This was carried out in two packages which lasted from 7 April to 31 July 2020. Note that this component of packages is now over.

In the first package, Enterprise Singapore funded 5 percentage points of commission costs charged by food delivery platforms like Bungkus, Chope, Deliveroo, foodpanda and GrabFood. Currently, these platforms charge a commission of 20 to 40% for regular deliveries. And on Grab’s website, it states that all GrabFood orders are subjected to a 30% service fee.

In the second package, F&B businesses fulfilling food delivery orders via third-party platforms received a 20% funding for their delivery costs.

Alongside ESG’s initiatives, banks have also made it easier for their F&B customers to connect with logistics partners. For example, OCBC has teamed up with Butleric to make onboarding on the platform hassle-free, with preferential rates.

Optimising sales with capability development pack

Enterprise Singapore has also worked out a capability development pack valued at more than S$1,500 for those onboarding Deliveroo, foodpanda and GrabFood.

This helps F&B businesses in aspects of marketing, data analytics and improvement in their online presence.

Capability Building: Businesses will learn how to enhance online performances of their menus, develop appropriate pricing structures as well as run promotions and bundle deals effectively.

Marketing: Companies can tap into the various platforms’ assets such as advertisements and online banners to promote products, run discounts and gain greater mindshare.

Data Analytics: Firms can access delivery performance reports to provide insights on volume of sales and orders, average delivery and food preparation, as well as customer profiles.

The food delivery platforms will also provide varying forms of onboarding support such as waiver of onboarding fee, free product photography and waiver of the first month’s commission.

Eligible F&B businesses include those with a food shop or food stall license issued by the Singapore Food Agency. They must also sell food that is prepared on-premise for immediate consumption.

The capability development pack will cost F&B firms a nominal fee of S$100 and will last for a year, from the date of application.

Applications are open from 13 April to 31 December 2020, on a first-come-first-served limited basis. Interested F&B businesses can sign up directly on the respective partner platforms: Deliveroo, foodpanda and GrabFood.

Up to 90% subsidy for F&B businesses to go digital

To encourage F&B businesses to build their online presence, Enterprise Singapore will fund an enhanced amount of up to 90% of eligible costs, including digital marketing and manpower costs, through the Enterprise Development Grant.

To qualify, F&B businesses must be registered and operating in Singapore and have a minimum of 30% local shareholding. You must also be in a financially viable position to start and complete a project, in which you will submit relevant documents such as your latest financial statements.

To get up to 90% subsidy in eligible costs, businesses have to focus on either creating a virtual brand, or develop an online to offline (O2O) strategy.

Virtual brands: According to ESG, virtual brands refer to an online-only concept that leverages on your existing capacity, branching off from your core brand. The idea is that virtual brands can bring in an additional revenue stream, by attracting new customer segments. Labour and rental costs are also significantly lower.

O2O strategies: While food delivery platforms provide access to a large customer base, it is also important for companies to build their own channels to engage with customers. One common way is to collect and analyse customer data for future marketing and sales purposes to provide more personalised promotions.

To take part in the Enterprise Development Grant, businesses must apply on the Business Grant Portal from 9 April to 31 December 2020.

Stay healthy, go digital

Keep your workers and business healthy during this period by going digital. In partnership with IMDA Go Digital Initiative, understand how OCBC digital solutions can help your business buy, sell and operate better during this time.

Disclaimer

You may be directed to third party websites. OCBC Bank shall not be liable for any loss suffered or incurred by any party for accessing such third party websites or in relation to any product and/or service provided by any provider under such third party websites.

The information provided herein is intended for general circulation and/or discussion purposes only. Before making any decision, please seek independent advice from professional advisors. No representation or warranty whatsoever in respect of any information provided herein is given by OCBC Bank and it should not be relied upon as such. OCBC Bank does not undertake any obligation to update the information or to correct any inaccuracy that may become apparent at a later time. All information presented is subject to change without notice. OCBC Bank shall not be responsible or liable for any loss or damage whatsoever arising directly or indirectly howsoever in connection with or as a result of any person acting on any information provided herein. Any reference to any specific company, financial product or asset class in whatever way is used for illustrative purposes only and does not constitute a recommendation on the same.


Discover other articles about:

Get started with us

Digitalise your business today

Explore a range of useful digital solutions to help your business buy, sell and operate better.