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New mobile platform to help F&B industry affected by MCO

A leading digital solutions company, called Touchpoint International Sdn Bhd (TPI), and a wholly-owned subsidiary of Sino Hua An International (SHA), announced that it has launched its digital application called M Squared (M2), a multi-sided, mobile-first community platform.

M2 is designed to help commercial, government and social communities connect and interact digitally on just one platform.

For the user, M2 will be the only app for all their daily interactions with mobile features such as e-commerce, mobile payment, food delivery, smart city features, event ticketing, travel planning and local community engagement.

The Founder of TPI and SHA head of technology said for businesses to survive the new normal, it is clear that bringing their business online is inevitable and COVID-19 has just escalated this need for retail businesses to go forward with an affordable solution.

The firm believes they understand the food and beverage (F&B) business more than any other developers because of our group’s business alliances.

Following support to the F&B industry, the firm’s immediate plans include delivery of fruit and vegetables, online education, resident community functions and smart city features.

Phase 1 of the M2 platform is aimed at helping the F&B industry, one of the most affected by Movement Control Order (MCO) due to COVID-19.

In addition to online delivery functionality, M2 offers a suite of merchant-friendly features that will be introduced in future upgrades of the app such as loyalty programmes, data analytics and so forth.

Merchants will also appreciate the ease in using the backend functions of the app that will give them complete control to fit the scope and nature of an individual business frame and full access to the app’s cashless payment processing using all major Malaysian e-wallets and overseas ones including WeChat, Alipay in Ringgit and RMB.

E-commerce should be something everyone embraces as this is the way forward. M2 will benefit both merchants and users equally. F&B platform delivery alone is a US$61 million market which is expected to grow to US$176 million by 2025.

The aim is to capture 15 per cent of this market in the next 24 months. The firm is confident to be able to achieve this due to the synergies from our platform’s unique features and community digital ecosystems.

Aiding the local F&B industry through tech

A recent article explained that a cloud kitchen (CK) is an online food production and delivery service. While the idea is more than a decade old, it has recently started becoming more popular.

With COVID-19-induced new social behaviours like social distancing, the online food delivery segment of F&B is getting more attention as an all-in-one solution for the struggling restaurant industry.

Key growth drivers for the market segment include an increase in smartphone users, internet penetration and a cashless economy made easy by digital payments. Distribution 4.0 — the upgrade of distribution networks to a more decentralised system — is the newest growth driver.

The cost of the supply chain and logistics will be the key constraint. This includes the cost incurred for order fulfilment, making deliveries, adjusting business resources to dynamic market demand and last-mile connectivity. Traditional restaurants stand to lose up to over a quarter of their profit if they fail to upgrade their logistics system to ensure on-time delivery.

While there is no evidence that COVID-19 is transmitted through cooked food, handlers must adhere to the highest standards. A potential solution is providing access to the public via live streaming of production line, or an accessible location such as glass kitchens.

The F&B industry requires a new vision, and perhaps it is time for an overall change in the infrastructure, in line with the latest trends.

What are these trends? For starters, over 95% of a restaurant’s business at the moment is off-premises, excluding self-pick-up. Also, menu items are being discounted by 30% to 50%. The delivery apps have slashed their commissions.

A more worrying trend is that over 5% of restaurants in Malaysia may close within the next 30 days; some 10% have already permanently shut down. Total revenue loss in this sector has topped RM105 million in the first four weeks of the MCO period and some 1 million paying jobs are estimated to be lost by mid-June unless the government steps in and provides some relief.

What is the sector to do? Here are some ideas:

The time is now for the F&B industry to embrace digital transformation and create new demands based on new trends. And they can do this, not simply as a stopgap measure while the pandemic rages on, but to ensure sustainability and a slice of the Asia Pacific market volume of US$100 million by 2024.

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