'Ghost' restaurants flourish in Ho Chi Minh City

Without tables, chairs or waiters, "ghost" restaurants are flourishing in Vietnam, serving only online customers.

Last month, Chef Station, a start-up cloud kitchen project, was officially launched. Located in Binh Thanh district, Ho Chi Minh City, Chef Station gathers many restaurants with diverse dishes. However, this "restaurant" has no tables and chairs and no service staff as it only sells food for customers who place online orders or take away.

Nhà hàng 'ma' bắt đầu rộ tại TP.HCM

Kitchen of a partner inside GrabKitchen. (Photo: Hai Dang)

The model of Chef Station is called “cloud kitchen” or "ghost" restaurant, or central kitchen. Under this model, many restaurants gather in the same location to cook food for delivery orders.

This type of restaurant is new in Vietnam but it has flourished all over the world. China, India, Japan, and South Korea are the countries where this form of business has developed. In India, the chain of the "ghost" restaurant called BOX8 has been operating since 2012, currently serving 22,000 dishes per day, with more than 100 stores in four cities. .

Before Chef Station was born, Grab had two central kitchens in Thu Duc and Binh Thanh districts, HCM City. The ride-hailing company has just opened another GrabKitchen, and plans to open more restaurants of this kind. In Indonesia, more than 50 GrabKitchens have been launched since last year.

Beamin, though entering Vietnam not long ago, has two Beamin Kitchens in District 1 and Binh Thanh District, HCM City.

The "ghost" restaurants have facilities, with kitchens of many different partners with an area of about 15-20 square meters each. The seller just has to send about two employees to the kitchen to cook. Receiving orders, delivering goods, advertising to attract customers... are performed by the investor and the two sides share the revenue.

Ms. Ninh Hoang Ngan, founder of Chef Station, said that during the Covid-19 period, restaurant owners had difficulty maintaining and opening more physical stores because they had to pay house rent, salary for workers, operation costs... Therefore, it would be reasonable to open a location with many different restaurants.

A partner of GrabKitchen said he had to close two restaurants in Hoi An due to the lack of tourists. His other two shops in Da Nang are suffering difficulties, partly due to recent storms. So he has joined three central kitchens opened by a ride-hailing firm to serve customers booking food through the application.

The owner of some Hue food restaurants has also participated in this supply chain. She only needs to cook a few typical main courses, and does not have to build an entire menu as with her own restaurant.

 

“If you open a restaurant, you must have a full menu for your dinners. You also have to organize all other things from receiving orders, delivering goods to shipper, operating the restaurant. But now I only need to cook a few specialties," the owner of the Hue restaurant explained.

When customers order food, the order will go directly to the kitchen where the staff processes the food. After finishing the food, Grab employees will go to each kitchen to pick it up, and hand it to the driver. This model is optimized for everything to keep running costs as low as possible.

For customers, the gathering of many eateries into one location helps them choose more dishes, saving time and delivery costs. For example, a person who wants broken rice, coffee, and fruit for dessert, usually has to place three different orders. However, the central kitchen model consists of many restaurants at one location, so it is possible to combine all ordered dishes into a single menu.

Food sellers participating in this model report that their orders have increased a lot compared to orders at their outside restaurants. The reason is that the kitchens are built by the ride-hailing company, so the company promotes the food to users.

However, food sellers said the limitation of this model is that they can cooperate with only one food delivery partner, not with many partners as they usually do when they open a restaurant.

According to the Southeast Asia Digital Economic Report 2019 from Google & Temasek, the number of people using online food delivery service in Vietnam is about 10.56 million, with revenue of $302 million, and annual growth rate of about 16.5%.

Vietnam's market penetration rate is only 9.8%, lower than the regional average of 16.3%, so the growth potential for domestic food delivery services is very high.

Hai Dang

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