The viability of a food delivery service in Yangon has been doubted in the past, but Yangon Door2Door and CEO Shady Ramadan are growing more popular.
Traditionally, for a city to be suited to a food delivery business, it needed a few things. Firstly, a large, defined central business district with high rise office buildings that allow for a great number of orders concentrated in a small area. The second requirement is an efficient road system that enables delivery drivers, in cars or on motorbikes, to collect the food and deliver it to customers quickly. The final requirement is a population that possess the income and demand for restaurant quality food to be delivered. Shanghai and Bangkok have these qualities, Yangon does not. Despite this, Yangon Door2Door, a food delivery service started by Egyptian Expat Shady Ramadan in 2013, continues to grow and has just secured a 50% equity investment from Mike Than Tun Win, the founder Flymya.com.
Inside their lime green Nawaday street office, a team of around 10 are taking orders, talking with restaurants and launching their 37 messengers (what Door2Door call their deliverymen) all around the city. Growth has been substantial, in July 2015 they had partnered with 28 restaurants and now there are more than 60 across Yangon, with plans to expand into Mandalay and Nay Pyi Taw. Over 100 meals are delivered on average each day, both during the week and on the weekend, up from 70 only a short time ago. Surprisingly, it is the dinner service that is most popular which Shady attributes to the tendency for local customers to bring lunch from home. When the service first began it was used entirely by expats, however now it is “about even” according to Shady and he has no desire to stop there. Locals are set to find it much easier to use Door2Door with the recent release of an app for the smartphone and the ability to order directly through their Facebook page, as well as the soon to be completed Myanmar language version of the company website.
Shady understands the importance of reputation for a new business and has built Door2Door on a foundation of respect: respect for his customers, his employees and his restaurant partners. The respect shown for the customer is evident in dealing with complaints. If there is a problem with the meal, whether a piece is missing or the order is incorrect, it is Door2Door’s problem. A liberal refunds policy means that the office will deal directly with the restaurant, “If a customer has to deal with the complaint, then the service is no longer convenient,” says Shady.
High standards are demanded for the messengers, who must follow strict food handling and safety protocols, including wearing helmets. Hiring and retaining a good workforce is the hardest challenge for a new business in Myanmar, and Shady seems to have a good eye for talent having created the new dispatch team entirely by promoting the best performing messengers. He firmly believes that you must hire “the who before the what,” that skills can be taught to the right people who will then help the business to grow. The company invests a lot of time into developing their workforce, with each messenger having to complete a stringent training program as well as maintaining the highest levels of service and safety, but also, through an arrangement with the NGO Myme, the messengers have a chance to spend time each day improving their English skills.
Door2Door enjoy good relationships with the restaurants listed, but there were challenges early in matching expectations. The dominance of Facebook in Myanmar’s internet means that most restaurants do not have a website, therefore they must communicate directly any unavailable items or changes, which doesn’t always happen as prudently as it should. It also took some time for restaurants to preference the messengers who came to collect the food, tending to focus on those customers in front of them. Shady is addressing this problem by collecting and analysing a much data as he can, which is very much in line with his IT background, including having messengers clock in arrival and departure times from restaurants to identify issues. When the company begun, they accepted restaurants in good faith and trusted that they would provide the necessary level of service. The trust travels both ways as Door2Door receives the food on credit and then repays the restaurant at the end of the period. The relationship with restaurants is becoming more of a partnership with some even agreeing to split the delivery cost with the customer (an initiative that has proved very popular especially for Myanmar cuisine), as well as more than 7 restaurants having no delivery fee attached to their food. Restaurants are realising that this is a service that only adds marginal expense to produce the extra food, but that can increase their customer base greatly. The number of partner restaurants looks set to keep growing over the next few years.
As with any new business, Yangon Door2Door is not without its challenges, a major one being to convince more locals to adopt the service. This will involve overcoming not just the perceived cost of delivery, which although is less than a two-way taxi, is unjustifiable to many locals, but also competing with the high quality home cooked food. Shady hopes that the new app will go a long way towards solving this problem as over 50% of orders come through smartphones, and mobile penetration looks to hit 90% in Yangon in the near future. Expansion into Nay Pyi Taw and Mandalay will be a large task, as the market is smaller than Yangon, however Shady is confident his business plan can handle the new cities, especially since restaurants who operate there and Yangon have been encouraging the expansion. It is likely too, that Yangon Door2Door may be in for a name change in the near future once the 3 major cities have been entered.
Author: David Harrod
David has a Bachelor of Commerce (Honours) from the University of Melbourne. The above article is part of a research project on the disruption of the mobile internet on life in Yangon that David was involved in as part of his internship at Consult-Myanmar Co Ltd in Yangon.
The same article was published on Myanmar Business Today on 27 Sep 2016. To see the article go to http://www.mmbiztoday.com/articles/yangon-door2door-going-strength-strength