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Klik-Eat’s challenges in scaling the food delivery business in Indonesia

klik eat cover

Who do you call when you’re hungry and want to eat something good at your home in Indonesia? Michael Saputra wants you to call Klik-Eat, the country’s online food delivery service. It has been over a year since the startup raised series A funding from Japan’s Yume no Machi Souzou Iinkai (JASDAQ: 2484), so we got in touch with Saputra, the Klik-Eat co-founder, to check up on the startup’s progress.

The team is currently working with over 500 restaurants all around Jakarta. They also have a spin-off business in the form of PapaBento, an online catering service for corporate events in Jakarta, Tangerang, and Bekasi areas. The new site now contributes 20 percent to Klik-Eat’s total transaction value.

Challenges on scaling

While Saputra does not reveal how many deliveries Klik-Eat makes every day, he does share that it now has 35 couriers ready to help restaurants reach more consumers. “This business is manpower intensive, so the scalability is quite tough,” says Saputra. He explains that his biggest challenge running Klik-Eat is not finding restaurant partners, but to manage the delivery service to customers.

See: 17 food apps and startups in Indonesia

Saputra adds, “In Jakarta, it’s hard to depend on [the restaurants’ own] delivery service, there are a lot of restraints.” According to him, restaurants usually don’t have a dedicated delivery guy to bring warm food to customers under any circumstances. The ones that do deliveries are usually just guys who happen to not be doing anything. “So the deliveries are prone to excuses like sickness, rain, etc. It’s very unreliable,” he explains.

Shift to mobile

klik-eat-website

Klik-Eat website

Klik-Eat is now gearing up for an expansion to Bandung, which will go live next month after the Lebaran holiday. The team is also paying a lot of attention to its mobile apps. Saputra explains that 55 percent of their transactions come from desktop users, with the rest from smartphones and phone calls.

He points out that while a near equal number of users access Klik-Eat from Android and iOS, the latter contributes 18 times more total transactions. “I guess the rumors are true that iOS users do spend more on their phones,” Saputra says.

During Ramadan, the team recorded a 30 percent jump in average website traffic. The team is also recording growing value per order, according to the co-founder.

We also discovered that Klik-Eat’s logo is now on IMJ Partners’ website, under the portfolio segment. When asked about this, Saputra just smiled and told us they will announce something very interesting soon.

Klik-Eat’s biggest competitor in Indonesia is Rocket Internet’s FoodPanda. While there are other online food delivery startups in the country, most of them are still operating in different cities.

Editing by Paul Bischoff

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