{"id":21335,"date":"2017-11-12T00:23:36","date_gmt":"2017-11-12T05:23:36","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/delivering-happiness\/"},"modified":"2017-11-12T00:23:36","modified_gmt":"2017-11-12T05:23:36","slug":"delivering-happiness-serving-customers-without-a-storefront","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/delivering-happiness-serving-customers-without-a-storefront\/","title":{"rendered":"\u201cDelivering Happiness\u201d \u2013 Serving Customers Without a Storefront"},"content":{"rendered":"

It\u2019s another busy morning for Fikri Gustin; he hasn\u2019t had a slow one since starting up Martabak Monkey – a pancake restaurant based in Bandung, Indonesia two years ago.[1] There is something very unusual about his restaurant: it has no tables, chairs, menus, or storefront. In fact, the only thing that resembles a restaurant is his small kitchen with two gas stoves. Operating straight from home, green-jacketed \u2018riders\u2019 line up in Fikri\u2019s living room, waiting for their customers\u2019 orders to be packaged.<\/p>\n

Digitalization of the Food Delivery Industry<\/strong><\/p>\n

With the introduction of GO-FOOD, an app-based food-delivery platform in Indonesia, Fikri is able to fulfill his dream of opening a restaurant out of his kitchen. Indeed, this technology has enabled small business owners like Fikri to operate a restaurant without having to open a physical store at all, adopting a fully digital delivery model where orders are automatically relayed from the customer to the restaurant in real-time and freelance riders are automatically assigned based on proximity to fulfill orders. This dramatically reduces initial capital requirements and subsequent operational costs of a restaurant business.<\/p>\n

The Rise of GO-JEK<\/strong><\/p>\n

GO-FOOD is a food-delivery service offered through the GO-JEK app ecosystem, Indonesia\u2019s first tech unicorn currently valued at ~US$3 Billion.[2] Started from its humble beginning as a ride-hailing app for bikes, GO-JEK rapidly expanded to provide a wide variety of services such as at-home massage and housekeeping. GO-JEK Co-Founder and CEO Nadiem Makarim (HBS \u201811) described the company as a \u201cplatform for the on-demand economy\u201d.[2] As this trend continues throughout Asia, pressure mounts for restaurant-owners to partner with these providers in order to remain competitive. In China for example, it is predicted that as many as 350 million consumers would have used similar services in 2018.[3]<\/p>\n

 <\/p>\n

\"\"<\/a><\/p>\n

GO-JEK riders waiting to pick-up GO-FOOD orders at a food store in Jakarta.<\/em><\/p>\n

Source: Reuters [4]<\/em><\/p>\n

Good for Consumers, Bad for Merchants?<\/strong><\/p>\n

Fikri and many other forward-thinking entrepreneurs decided to ride the wave of change by becoming one of the first merchants to partner with GO-FOOD in 2015. Since then, GO-FOOD\u2019s restaurant partnerships has grown from 15,000 at launch to more than 85,000 in 2017.[5] Fikri himself has seen 100-fold increase in the orders he received.[6] Research done by other organizations support this evidence: Indonesia Franchise Association estimates 30% increase in revenue of its members after partnering with the platform.[4] In the short-term, many more restaurant owners will follow Fikri\u2019s steps in partnering with GO-FOOD to gain access to the growing massive customer base.<\/p>\n

\"\"<\/a><\/p>\n

Source: McKinsey and Company [7]<\/em><\/p>\n

The medium-term paints a different picture. As many more restaurants and big franchises form partnership with GO-FOOD, relative competitive advantage of each partner diminishes, as every player would gain access to both the customer-base and rider-base. Furthermore, the visibility advantage also diminishes since the customer will be flooded with a wealth of choice. To this point, Fikri\u2019s medium-term strategy is to eventually build his own delivery armada.[8] He predicts that this is only possible if his brand has grown popular enough such that customers is willing to contact him directly. At that point, paying salary to deliverymen may become cheaper than the 20% cut GO-FOOD charges per transaction.[9]<\/p>\n

Recommendations<\/strong><\/p>\n

Martabak Monkey should prepare both offline and online advertising campaigns to increase customers\u2019 awareness. This allows them to increase orders in the face of growing competition with other restaurants featured on GO-FOOD. Martabak Monkey could employ a unique yet cost-efficient marketing strategy using social media, online influencers and paid advertising campaigns. They could also analyze customer behavior data available through the GO-FOOD platform to enable them to optimize inventory and labor usage with regards to predictable movements in demand.<\/p>\n

In the medium-term, Martabak Monkey should prepare for upstream digitalization. GO-JEK or other companies might provide similar platform specializing in ingredients and inventory procurement, with wholesalers and grocers as partners. This could potentially revolutionize the sourcing industry by enabling restaurants to closely manage their inventory and perform JIT ingredients delivery through riders. Again, Martabak Monkey need to maintain its position as early adopter to keep an edge over the ever-growing competition in the food services industry.<\/p>\n

Conclusion<\/strong><\/p>\n

The digitalization of food delivery serves as an example that a third-party may add value to the supply chain by bridging the gap between existing restaurant-customer relationship. By increasing visibility of supply and demand, and reducing the lag time in order fulfillment, platforms such as GO-FOOD eliminates the need for a physical storefront and traditional delivery system. However, as the number of restaurant partners grow, the visibility benefits brought by the platform diminishes, as customers is faced with increasingly complex variety of options.<\/p>\n

As Fikri expands his franchise to five cities this year, what should he keep in mind regarding his increasing dependency on GO-FOOD? What would happen to his business if a GO-FOOD competitor enters the market?<\/p>\n

(Word Count: 796)<\/p>\n

References:<\/p>\n

[1] GO-JEK Indonesia, \u201cGO-FOOD Merchant Story \u2013 Martabak Monkey (Bandung),\u201d YouTube, published June 23, 2017, https:\/\/www.youtube.com\/watch?v=Li_LY9nmaUw, accessed November 2017.<\/p>\n

[2] Sudhir T. Vadaketh, \u201cJune Cover Story: The Go-Jek Effect,\u201d Inc. Southeast Asia, May 29, 2017, http:\/\/inc-asean.com\/editor-picks\/GO-JEK-effect\/, accessed November 2017.<\/p>\n

[3] Wang Zhuoqiong, \u201cDelivery apps gulp down food biz,\u201d China Daily, http:\/\/www.chinadaily.com.cn\/bizchina\/2017-11\/06\/content_34172385.htm, accessed November 2017.<\/p>\n

[4] Gayatri Suroyo and Stefanno Reinard, \u201cJakarta\u2019s traffic-clogged economy gets a lift from motorbike deliveries,\u201d Reuters, https:\/\/www.reuters.com\/article\/us-indonesia-economy-gojek\/jakartas-traffic-clogged-economy-gets-a-lift-from-motorbike-deliveries-idUSKBN1AA2W5, accessed November 2017.<\/p>\n

[5] Antonia Timmerman, \u201cGo-Jek\u2019s food delivery beats all Indian food startups combined: Piotr Jakubowski,\u201d Deal Street Asia, https:\/\/www.dealstreetasia.com\/stories\/after-foodpanda-GO-JEKs-food-delivery-beats-all-indian-food-startups-combined-piotr-jakubowski-cmo-69821\/, accessed November 2017.<\/p>\n

[6] Fikri P. Gustin, \u201cDo Not Pray for Easy Life, Pray to be Stronger Man,\u201d Medium, April 6, 2017, https:\/\/medium.com\/@sippii\/do-not-pray-for-easy-life-pray-to-be-stronger-man-2b3adea4bd6e, accessed November 2017.<\/p>\n

[7] Carsten Hirschberg et al., \u201cThe Changing Market for Food Delivery,\u201d McKinsey & Company, November 2016, https:\/\/www.mckinsey.com\/industries\/high-tech\/our-insights\/the-changing-market-for-food-delivery, accessed November 2017.<\/p>\n

[8] Fikri P. Gustin, \u201cPros and Cons of a GO-FOOD Partner,\u201d Kaskus, April 19, 2017, https:\/\/www.kaskus.co.id\/post\/58f78be112e25794438b456e#post58f78be112e25794438b456e, accessed November 2017.<\/p>\n

[9] Wataru Suzuki, \u201cIndonesia ride-hailing app finds new opportunities in food delivery,\u201d Nikkei Asian Review, August 21, 2017, https:\/\/asia.nikkei.com\/Business\/Companies\/Indonesia-ride-hailing-app-finds-new-opportunities-in-food-delivery, accessed November 2017.<\/p>\n","protected":false},"excerpt":{"rendered":"

Digitalization of food delivery through the emergence of food-delivery platforms enables small business owners to operate without a physical store. As the popularity of these services continue to grow, how should restaurants adapt to stay competitive?<\/p>\n","protected":false},"author":10037,"featured_media":21336,"comment_status":"open","ping_status":"closed","template":"","categories":[599,2123,20,1589,2196],"class_list":["post-21335","hck-submission","type-hck-submission","status-publish","has-post-thumbnail","hentry","category-digital-platform","category-digitalization","category-food-delivery","category-food-service","category-go-jek","hck-taxonomy-organization-martabak-monkey","hck-taxonomy-industry-food-and-beverage","hck-taxonomy-country-indonesia"],"connected_submission_link":"https:\/\/d3.harvard.edu\/platform-rctom\/assignment\/rc-tom-challenge-2017\/","yoast_head":"\n\u201cDelivering Happiness\u201d \u2013 Serving Customers Without a Storefront - Technology and Operations Management<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/delivering-happiness-serving-customers-without-a-storefront\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"\u201cDelivering Happiness\u201d \u2013 Serving Customers Without a Storefront - Technology and Operations Management\" \/>\n<meta property=\"og:description\" content=\"Digitalization of food delivery through the emergence of food-delivery platforms enables small business owners to operate without a physical store. As the popularity of these services continue to grow, how should restaurants adapt to stay competitive?\" \/>\n<meta property=\"og:url\" content=\"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/delivering-happiness-serving-customers-without-a-storefront\/\" \/>\n<meta property=\"og:site_name\" content=\"Technology and Operations Management\" \/>\n<meta property=\"og:image\" content=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2017\/11\/Martabak_Monkey_Logo_Clear_Space2-02_400x.png\" \/>\n\t<meta property=\"og:image:width\" content=\"400\" \/>\n\t<meta property=\"og:image:height\" content=\"109\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/png\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data1\" content=\"5 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/submission\\\/delivering-happiness-serving-customers-without-a-storefront\\\/\",\"url\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/submission\\\/delivering-happiness-serving-customers-without-a-storefront\\\/\",\"name\":\"\u201cDelivering Happiness\u201d \u2013 Serving Customers Without a Storefront - Technology and Operations Management\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/submission\\\/delivering-happiness-serving-customers-without-a-storefront\\\/#primaryimage\"},\"image\":{\"@id\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/submission\\\/delivering-happiness-serving-customers-without-a-storefront\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/wp-content\\\/uploads\\\/sites\\\/4\\\/2017\\\/11\\\/Martabak_Monkey_Logo_Clear_Space2-02_400x.png\",\"datePublished\":\"2017-11-12T05:23:36+00:00\",\"breadcrumb\":{\"@id\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/submission\\\/delivering-happiness-serving-customers-without-a-storefront\\\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/submission\\\/delivering-happiness-serving-customers-without-a-storefront\\\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/submission\\\/delivering-happiness-serving-customers-without-a-storefront\\\/#primaryimage\",\"url\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/wp-content\\\/uploads\\\/sites\\\/4\\\/2017\\\/11\\\/Martabak_Monkey_Logo_Clear_Space2-02_400x.png\",\"contentUrl\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/wp-content\\\/uploads\\\/sites\\\/4\\\/2017\\\/11\\\/Martabak_Monkey_Logo_Clear_Space2-02_400x.png\",\"width\":400,\"height\":109},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/submission\\\/delivering-happiness-serving-customers-without-a-storefront\\\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Submissions\",\"item\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/submission\\\/\"},{\"@type\":\"ListItem\",\"position\":3,\"name\":\"\u201cDelivering Happiness\u201d \u2013 Serving Customers Without a Storefront\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/#website\",\"url\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/\",\"name\":\"Technology and Operations Management\",\"description\":\"MBA Student Perspectives\",\"potentialAction\":[{\"@type\":\"性视界Action\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"\u201cDelivering Happiness\u201d \u2013 Serving Customers Without a Storefront - Technology and Operations Management","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/delivering-happiness-serving-customers-without-a-storefront\/","og_locale":"en_US","og_type":"article","og_title":"\u201cDelivering Happiness\u201d \u2013 Serving Customers Without a Storefront - Technology and Operations Management","og_description":"Digitalization of food delivery through the emergence of food-delivery platforms enables small business owners to operate without a physical store. As the popularity of these services continue to grow, how should restaurants adapt to stay competitive?","og_url":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/delivering-happiness-serving-customers-without-a-storefront\/","og_site_name":"Technology and Operations Management","og_image":[{"width":400,"height":109,"url":"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2017\/11\/Martabak_Monkey_Logo_Clear_Space2-02_400x.png","type":"image\/png"}],"twitter_card":"summary_large_image","twitter_misc":{"Est. reading time":"5 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/delivering-happiness-serving-customers-without-a-storefront\/","url":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/delivering-happiness-serving-customers-without-a-storefront\/","name":"\u201cDelivering Happiness\u201d \u2013 Serving Customers Without a Storefront - Technology and Operations Management","isPartOf":{"@id":"https:\/\/d3.harvard.edu\/platform-rctom\/#website"},"primaryImageOfPage":{"@id":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/delivering-happiness-serving-customers-without-a-storefront\/#primaryimage"},"image":{"@id":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/delivering-happiness-serving-customers-without-a-storefront\/#primaryimage"},"thumbnailUrl":"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2017\/11\/Martabak_Monkey_Logo_Clear_Space2-02_400x.png","datePublished":"2017-11-12T05:23:36+00:00","breadcrumb":{"@id":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/delivering-happiness-serving-customers-without-a-storefront\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/d3.harvard.edu\/platform-rctom\/submission\/delivering-happiness-serving-customers-without-a-storefront\/"]}]},{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/delivering-happiness-serving-customers-without-a-storefront\/#primaryimage","url":"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2017\/11\/Martabak_Monkey_Logo_Clear_Space2-02_400x.png","contentUrl":"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2017\/11\/Martabak_Monkey_Logo_Clear_Space2-02_400x.png","width":400,"height":109},{"@type":"BreadcrumbList","@id":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/delivering-happiness-serving-customers-without-a-storefront\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/d3.harvard.edu\/platform-rctom\/"},{"@type":"ListItem","position":2,"name":"Submissions","item":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/"},{"@type":"ListItem","position":3,"name":"\u201cDelivering Happiness\u201d \u2013 Serving Customers Without a Storefront"}]},{"@type":"WebSite","@id":"https:\/\/d3.harvard.edu\/platform-rctom\/#website","url":"https:\/\/d3.harvard.edu\/platform-rctom\/","name":"Technology and Operations Management","description":"MBA Student Perspectives","potentialAction":[{"@type":"性视界Action","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/d3.harvard.edu\/platform-rctom\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"}]}},"_links":{"self":[{"href":"https:\/\/d3.harvard.edu\/platform-rctom\/wp-json\/wp\/v2\/hck-submission\/21335","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/d3.harvard.edu\/platform-rctom\/wp-json\/wp\/v2\/hck-submission"}],"about":[{"href":"https:\/\/d3.harvard.edu\/platform-rctom\/wp-json\/wp\/v2\/types\/hck-submission"}],"author":[{"embeddable":true,"href":"https:\/\/d3.harvard.edu\/platform-rctom\/wp-json\/wp\/v2\/users\/10037"}],"replies":[{"embeddable":true,"href":"https:\/\/d3.harvard.edu\/platform-rctom\/wp-json\/wp\/v2\/comments?post=21335"}],"version-history":[{"count":0,"href":"https:\/\/d3.harvard.edu\/platform-rctom\/wp-json\/wp\/v2\/hck-submission\/21335\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/d3.harvard.edu\/platform-rctom\/wp-json\/wp\/v2\/media\/21336"}],"wp:attachment":[{"href":"https:\/\/d3.harvard.edu\/platform-rctom\/wp-json\/wp\/v2\/media?parent=21335"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/d3.harvard.edu\/platform-rctom\/wp-json\/wp\/v2\/categories?post=21335"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}