Dah Makan finds its way to customers’ hearts through their stomachs
By Anushia Kandasivam November 9, 2016
- Integrated, centralised model means more efficient service
- Customer experience integral to business success
THE average working adult is no stranger to food delivery; a heavy workload and long hours often make meals at your desk a necessity. But healthy delivery options are hard to come by and people do not want to spend too much time and effort thinking about what to eat when all they want is a quick and convenient meal.
This is the gap that Dah Makan sought to fill when it first burst onto the market with its healthy gourmet meal delivery service. “We saw Southeast Asia as a very interesting region for this business model. In Malaysia especially, there is very strong food delivery behaviour that is driven by the city structure, food choices and tech savviness of the people,” says co-founder and CEO Jonathan Weins.
Wiens as well as co-founder and COO Jessica Li were in Hong Kong launching Food Panda when the idea for Dah Makan hit them. The two are similar but very different – while the former is a marketplace that aggregates choices, Weins and Li, together with third founder and CTO Christian Edelmann, wanted to create a new integrated model that would allow them to control the quality and price of the food as well as the customer experience.
This means that Dah Makan is a centralised model with its own kitchen and chef, and its own delivery fleet. The Dah Makan team runs everything from the website, mobile app and orders to shopping for ingredients and conceptualising the daily-changing menu.
The founders chose Kuala Lumpur to set up base because they saw a fast-growing startup ecosystem, reveals Weins. Dah Makan obtained MSC status in Oct this year, allowing it to leverage on a good support system and wider talent pool.
Solving a problem
Weins, Li and Edelmann started Dah Makan in early 2015 with no network, which forced them to research the market by literally speaking to potential customers to understand their behaviour, all the while trying to answer the perennial question: Are we really solving a problem or is this just another trend?
Weins relates how he approached a potential customer, a random man in a suit who was sitting at a café one afternoon eating something healthy. “When I told him our idea he said he would order every day from us. I didn’t think he was serious but I gave him our web address. He did indeed order from us every day, and then started to order for his spouse and colleagues. This really encouraged us to keep on going,” he quips.
“We have had very encouraging customers from early on, which we are very grateful for.”
Weins makes it clear that customer experience is important for Dah Makan. This is apparent from the revisions the startup has made to its website and app. The first version of the app was launched in September 2015 and Dah Makan immediately began collating customer feedback and improving the user experience.
He notes that this feedback was also very useful in figuring out what concepts would work for the business and what would not. Globally, many food delivery models are trying to solve the same problem Dah Makan is, and many try to cater to the convenience factor – on-demand delivery or five-minute delivery. When the Dah Makan team tested this concept locally, it quickly realised that it was too expensive to work and did not solve the core problem Malaysians were facing.
“People don’t need quick food in five minutes, they need good food in half an hour or an hour. Or in our case, most people want to pre-order their food,” reveals Weins, adding that many customers pre-order their lunches for the working week on a Sunday.
Dah Makan still strives for constant improvement. Initially, customers had to make their orders two days before the delivery date to allow for preparation time. In July this year, Dah Makan was able to offer next-day delivery due to a more efficient production line. From Oct 26, customers have been able to order meals up to 45 minutes before delivery time.
One-hour delivery is far from unique but what makes Dah Makan interesting is a model that does not depend on several restaurant kitchens but rather a centralised production that makes Dah Makan cheaper for the customer than other existing options.
Very strong pre-ordering behaviour from customers allows this model to work, but Dah Makan is now able to service last-minute on-demand orders by simply adding them into the production and delivery systems without compromising efficiency.
In fact, the startup uses an algorithm designed specifically for it that maps out the most efficient delivery routes each day.
As with any startup, there is always a question whether to use third-party tools or create your own – the website runs on Shopify – but when it came to the route calculation programme, there was nothing that fit Dah Makan’s parameters so the startup brought in a programmer to build it.
Weins says that this algorithm allows Dah Makan to operate at 30% of the delivery cost or 70% less than Food Panda, which saving transfers onto customers as free delivery and gourmet food at reasonable prices. Dah Makan now offers three options for each meal – lunch and dinner – but will soon expand the menu to five options.
“Our model is a game-changer for the food delivery ecosystem. It combines the ability to cater to on-demand orders with the pre-order bulk production system. No-one has really done this before. This kind of choice offers flexibility, affordability and great customer experience,” says Weins.
Dah Makan started out with just the three founders doing everything from shopping for ingredients, cooking, delivering and going out and speaking to customers. It was difficult, says Weins, but worth it because of their passion for the idea.
Initially, the startup was self-funded by the founders. Weins points out that with the their business experience, they could have obtained a good amount of investment early on and built the business up very quickly, but had they done so they would not have been able to really learn about the market, create relationships with customers or take advantage of the build-measure-learn cycle.
“In the beginning it was extremely lean. The biggest investment is your time,” he says.
After receiving positive feedback and gaining some traction, Dah Makan raised its first round of investment – US$80,000 (RM340,184) – through an angel investor in March 2015. Most of it went into developing the website, app and back-end technology.
“When you are a startup without many resources, you have to use other things to convince people to work with you,” says Weins, speaking about both getting investors and hiring experienced staff such as Dah Makan’s programmers and chef.
“They saw the vision we had and especially how much effort and passion we put into our idea.”
Weins reveals that Dah Makan’s business model was challenging to build as it is essentially three companies in one – a food production one, a logistics one and a technology company. “We had to combine the parts tightly and in a very smart way to provide a good user experience.”
Dah Makan currently receives about 1,000 orders per day and aims to have this reach 10,000 in a year or two, a comfortable target, according to Weins. This scaling up will be supported by the startup’s delivery route algorithm; calculations show that with 10 times as many orders, the startup will only have to expand its delivery fleet by two or three times.
Beyond that, Dah Makan plans to be in Singapore and Jakarta by early next year, as well as other Malaysian cities besides Kuala Lumpur – it has had people writing in from Penang and Johor Baru (major cities in the north and south of the country) asking when Dah Makan will come to them.
“Because of the way we produce and deliver, we will focus first on the very high density areas and then potentially spread out. The more people we serve on a daily basis, the better the service will be and the more affordable our meals will be,” explains Weins.
Bangkok, Taipei, Hong Kong and certain parts of Manila are on the books for the future; the founders have had the vision of taking the business regional from the very beginning.
“We want to change the food-delivery market and the way people eat on a daily basis,” says Weins. “We want to serve the entire working population in metropolitan areas of Asia. If you think about lunch, think of Dah Makan.”
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