Chope wants to be the ‘Netflix’ of the restaurant industry, and here’s how it plans to do it

It may be a “classic” startup move to experiment on new products and models, not knowing if they will work, as Chope CEO Arrif Ziaudeen puts it. But for the Singapore-based restaurant management platform, recent bets have certainly paid off – even to its chief’s surprise, in some instances.

Last year, the company introduced off-peak deals, which took off at a pace that exceeded Ziaudeen’s expectations. And as of August 2019, its Indonesia business has quadrupled year-on-year – another surprise.

Chope CEO Arrif Ziaudeen / Photo credit: Chope

Chope currently processes over 250,000 transactions a month. Year-on-year transactional growth has gone up by 80%, and the cumulative effect has been an almost twofold increase in revenue from S$10.4 million (US$7.5 million) to S$19.5 million (US$14.1 million) in 2018, a number that Ziaudeen sees doubling again in 2019.

But last year was also about the less glamorous task of trimming operating expenses, he says. To do this, the company restructured commissions to improve sales efficiency and reviewed customer acquisition costs.

Today, Chope processes over a million dining reservations monthly across eight cities in Asia – Singapore, Hong Kong, Shanghai, Beijing, Bangkok, Phuket, Bali, and Jakarta. It’s now in the process of another fundraise to fuel growth in existing markets, develop its product line, and expand to new cities. Ziaudeen declined to specify the exact amount the startup was targeting, but he said the round was “mostly filled.” Chope is also drawing interest from existing investors as well as those outside of its home markets.

The company’s last fundraise was two years ago, when it secured S$18 million (US$13.1 million) in a round led by Australian venture capital firm Square Peg Capital. It also counts Susquehanna International Group, Openspace Ventures and SPH Ventures among its backers.

Defying expectations

Chope launched in 2011 with one mission: to ease the process of restaurant reservations, which, up until then, was cumbersome and usually done over the phone. Its offerings have since expanded to include deals as well as software that it licenses to restaurants for a monthly fee. These software solutions include table and queue management, analytics, and marketing support.

Ziaudeen was initially skeptical of deals, citing how the fall of Groupon made the Chope team “wary of the brand association” with the daily deals site. But there was no denying how positive the response was, from both diners and restaurants, towards discounts that Chope was awarding patrons for making reservations. In 2018, the company decided to launch its deals business on a larger scale, and revenue soared.

Off-peak promotions account for roughly 40% of all deals that Chope offer today. Think of it as the equivalent of dynamic pricing in ride-hailing: prices surge during peak periods and drop at quieter times of the day. By doing this, diners are enticed to visit restaurants at non-peak hours, and restaurants can maximize the usage of fixed-cost items like rental and staff.

Competing restaurant platforms like Thailand’s Eatigo, Malaysia’s Offpeak and Tableapp offer users discounts and table-booking, as well as dining guides on new food trends and restaurants, but Chope’s most formidable contender in variable pricing is arguably Eatigo. The Bangkok-headquartered startup also offers time-based discounts of up to 50% to users who dine at its over 4,000 participating restaurants. It is present in all of Chope’s major markets – as well as in areas where the Singaporean platform isn’t – Malaysia, India and the Philippines.

App store rankings can be thought to be a function of app usage, ratings and review volume, number of downloads, among other factors. As of September 10, App Annie reveals that Eatigo consistently outranked Chope in the food and beverage industry on Apple’s App Store as well as Google Play store for Android devices, in all of Chope’s main markets.

Doubling down on Indonesia

Meituan-Dianping partnership

Software as an enabler