The Competition and Consumer Commission of Singapore (CCCS) has concluded its investigation into the online food delivery and virtual kitchen sectors in Singapore after 10 months, following a complaint regarding anti-competitive conduct last year.
In a press release on August 5, CCCS notes that competition in the virtual kitchen sector remains “dynamic”, with players entering and competing for market share.
CCCS started investigations into the online food delivery and virtual kitchen sectors in September 2019, following a complaint from Smart City Kitchens' general manager Warren Tseng last July. The conduct investigated by CCCS includes the refusal to supply online food delivery services to F&B operators using Smart City Kitchen’s virtual kitchens.
Tseng had claimed that online food delivery companies Deliveroo and GrabFood refused to list restaurants operating out of its Tampines kitchen on their platform.
Smart City Kitchens, which opened a 13,000 sq ft facility in June 2019, says it is the first local operator not affiliated with a delivery service. That said, the company is run by a subsidiary of former Uber Chief Executive Officer Travis Kalanick's real estate company City Storage Systems.
Following CCCS’s investigation, GrabFood and Deliveroo have started supplying their online food delivery services to F&B operators in Smart City Kitchen’s virtual kitchens, which already have access to Foodpanda’s online food delivery service.
“As a result, F&B operators using Smart City Kitchen’s virtual kitchens now have the choice of using multiple online food delivery providers to expand their consumer reach,” says CCCS.
“There is greater competition in the virtual kitchen sector, and consumers are also able to enjoy a greater choice of food ordered online. With greater competition, businesses are incentivised to innovate to cater more efficiently to the evolving needs and preferences of their customers.”
The statutory board of the Ministry of Trade and Industry says it will continue to monitor the conduct of market players in the online food delivery and virtual kitchen sectors.
Virtual kitchens are integrated commercial kitchen spaces provided to F&B operators for food preparation, predominantly for online food delivery services here. Virtual kitchens provide another channel for F&B operators to start small and gradually expand their business through online food deliveries, without the costs associated with running a dine-in restaurant
Deliveroo’s virtual kitchen is branded as Deliveroo Editions, Foodpanda’s virtual kitchen is branded as Favourites by Foodpanda, and GrabFood’s virtual kitchen is branded as GrabKitchen. Besides providing facilities that house multiple virtual kitchens, virtual kitchen providers may also provide related services such as the management and sorting of food orders to facilitate pick up by delivery personnel.
