My name is Maxim Firsov, I am the CEO Foodfox. Of the project Manager Lamoda Group, I became the founder of a startup in which to invest my former employers. I was looking for an idea for your own business and found it to be a problem faced as a consumer. I tried to order in the office or home food from good restaurants.
“Tried” being the key word. It turned out that the restaurants that I loved for great food and a great atmosphere, did not know how to arrange delivery, for many it is not. Where the delivery was, it was often cost 200-300 rubles, and even the minimal check at the same time — 1000 rubles. If I want to order a Burger for 400 roubles, I need to buy something else unnecessary to pay for the shipping.
The way a hungry person to the cherished pasta or the Burger turned out to be a long and thorny road. Then make the order, and his promise to bring “about an hour”. An hour and a half it turns out that the courier was lost, but will be soon”. Courier calls 15 minutes later and in broken Russian says that cant find your staircase.
After another half an hour, if lucky, get your food cold. What happened to the order in these two hours, each time remained a mystery, but the results are impressive. Sterlitamakskiy Burger from Sean” once got me in a jumble of bread, meat, sauce and fries.
Ive tried network pizza restaurants and sushi with an established shipping, but at some point I realized that I cant eat a rubber pizza or sushi is second rate. I didnt understand why have to find a compromise between the delicious food and reliable delivery. I want both, with no minimum cheque free. The idea of doing their business I was for a long time.
Prior to joining Lamoda Group, I worked in the investment Bank, and already knew that my business will be associated with ecommerce. This is one of the few industries that grows rapidly, whatever happens at the macro level. Scope of delivery food also looked attractive. The potential market is huge, competition still low.
The entire Russian public catering “weight”, according to various estimates, $9-15 billion, for delivery and takeaway orders account for about 5% of the market. In Western Europe and the United States the share of this segment 8-10%, South Korea — all 15%. Russian shipping market is growing at 20% per year. Moreover, if you have your own logistics can not be limited the online market and to raise the proportion of” even and offline.
What is even more interesting is the explosive growth of global food tech, there are companies and services that use new technologies perepryatyvat the process of purchase and consumption of food. Simply put, doing with the food what online shopping has made shopping, online booking system — travel, Uber and Gettaxi with movements around the city. The main trend in food tech services hyperlocal delivery. They hire couriers and bring the food from the restaurants close to the customer.
And most importantly — with its own logistics can be open for the delivery of those restaurants that it was not there before. This allows you to make really high-quality selection of restaurants only work with the best and no one could depend. In Russia is constantly evolving gastronomic culture and the culture of consumption in General. The fact that the delivery market we have 80% consists of pizza and sushi, is associated primarily with the lack of quality offers.
Many people are already tired of low-quality network delivery, people more than before, care about their health and watching what kind of food they eat. The argument “cheaper than a restaurant” is also not working. Meals at premium restaurants, as a rule, are the same and sometimes cheaper than the chain establishments. This is due to the fact that restaurants make money on drinks and alcohol, thereby increasing the average check in the hall, and at delivery you dont have to order alcohol at exorbitant prices.
Seeing at what level is the delivery service in Russia, we knew that the Western experience that we want to bring to the domestic market, will make a fantastic impression. Little things like binding the Bank card and payment in one click you can not even mention.
I left Lamoda Group last summer, about the same time resigned my colleague Sergey Polissar, who held the position of Vice President of business development. We worked in the same team, start joint projects, therefore, to agree on joint business was easy. We started with the fact that it defined the main problems of the existing market. To flip the market needed not just a new service and a new operating model.
How do the aggregators delivery. Get the order, transmit to the restaurant, the restaurant this order somehow delivers. To control the speed of delivery, level of service or quality of food is impossible. We decided that we will have our own logistic platform, carefully selected restaurants and local delivery. Actually, thats all changed.
By December we were ready MVP website and CRM system. It was the minimum necessary to connect the restaurants, check the demand and debugging business processes. The first clients were friends and friends of friends. Few months, we have tested the model, gathering feedback on our service and see what solutions work better.
In March, we officially launched Foodfox. In April launched the first version of iOS application. The results of the first months inspire. We have more than 170 restaurants, 41% of customers make a repeat purchase, on average, a loyal customer orders a delivery every two weeks (for model net aggregator is a good indicator of 10-15%), post office and write in chat for grateful users.
The next milestone in the development of the product was to courier the application. The app allows us to track the movement of the couriers and update the order status in the online mode. Now use this feature inside, but soon the track couriers will be part of the product for users. We want the client to see who gives him food and whats happening with your order right now.
The plan is to give customers the opportunity to evaluate the quality of delivery and to leave a tip online. In June we attracted a round of financing from professional investors. The lead investor is a venture capital Fund Global Target, and the other was Florian Jansen and Niels Tonsen, the co-founder of Lamoda Group.
Foodtech-the market is of interest to us, which is confirmed as our investment in major international players. Delivery Hero and Blue Apron, and seed investment in LemonCat, Mixville (sold Unigel) and Foodfox. We closely follow the development of this segment in Europe and the United States, and we believe the development of businesses with their own delivery undisputed world trend. This model works well in most countries. In Russia this niche is free and has excellent potential.
The total market for food in Russia — about $9 billion, while the share of restaurants with their own delivery in developed countries is around 9-10%. That is, the aggregators deliveries from restaurants in Russia claim to market at $900 million — $1 billion, while Foodfox opens the remainder of the market at $8 billion to order via the Internet. So we are seeing good business growth in this segment and are excited to start working with a professional team Foodfox. Now we are developing in several directions.
The project has a clear, interesting, and most importantly, not working, tested using the MVP concept. This allowed the company to attract substantial investment at an early stage. Team Foodfox not make another clone of Delivery Club, and is in a relatively busy segment “more premium” restaurants and relies on the quality of service.
In such a busy metropolis like Moscow, local food delivery is the right solution that will allow you to receive your order in two hours, but much earlier. If a person is hungry, he wants to dish as soon as possible, ideally within the next half hour. So the request from the audience is clearly there, and Foodfox able to meet. The average check size, according to “Vedomosti”, is 1750 rubles.
Earns through Commission from restaurants — 20-30% of the total order. Shipping is free, that is, with an order for 500 rubles service work only 100 rubles; shipping will obviously cost twice as much. There is a risk that the number of orders, the delivery of which is unprofitable for the service is greater than originally calculated. It will be interesting to see how the team will solve this problem.
By the way, Delivery Club is also moving in the direction of improving the quality of service. As a user I noticed that they have improved integration with restaurants, began to appear establishments with guaranteed delivery. In any case, the ensuing competition end consumers will benefit.