Launched in mid-2012, Kenyan startup Yum had first mover advantage in the online food ordering market in the East African country. But with big-spending Africa Internet Group (AIG)-owned hellofood now working in the same space, the startup has gone back to basics – narrowing its geographic focus in order to improve customer services.
It may have been launched in 2012 – by Jake Goldberg and Michael Hudson of the One Acre Fund – but Yum manager of marketing analytics and technology Evan Frazer told Disrupt Africa the startup had only really started to take off at the end of 2013.
“The Yum founders are still at the One Acre Fund. It was just a side project and it really started to take off in the middle of 2013, or little over a year ago. That’s when it really started to grow,” he said.
Coincidentally, this wasn’t long after hellofood entered the market in Kenya, busying a space Yum had previously had all to itself. A short drive around Nairobi and a look at the advertising billboards promoting hellofood’s wares is all it takes to realise quite how deep AIG’s pockets are compared to most other Kenyan startups. But Frazer believes Yum – which makes money by charging restaurants a commission on delivered food and customers a small delivery fee – can find room in the market.
“My interaction around hellofood has been around the restaurants. Restaurants are looking for who the customers are and why be on both. I think hellofood did a good job approaching lots of lots of restaurants in the beginning. Our goal is to try and provide brilliant customer service as we play catch up,” he said.
Frazer believes restaurants would be best served by putting their products on both platforms in order to reach as many potential customers as possible.
“Honestly, it makes sense to be on both. Yum and hellofood might have very slightly different target audiences. But it just opens up the ability of the restaurant to reach more customers,” he said.
“I think the market is big enough. There are some areas that we don’t think anyone has tapped into.”
Nevertheless, strategic decisions have had to be taken. Refreshingly in an age where small businesses seem concerned to expand as soon as possible, whatever the cost and regardless of whether their product is properly honed, Yum has actually chosen to narrow its focus in order to focus on customer service – by which it means delivery times.
“We came to the decision that we’re actually going to scale down our neighbourhoods and focus on delivery,” Frazer said, pinpointing the Nairobi wards of Westlands, Lavington and Kilimani as Yum’s focus neighbourhoods, while they have their eyes on growing a few other strategic locations.
“Those are probably our sweet spot in restaurant offerings and where we generally focus and see the right number of people.
“The biggest indicator of success is delivery times, whether here in Nairobi, or San Francisco, or Vancouver. Whatever you can do to bring down delivery times is a big indicator of success.”
He said planning, and the use of data to make sure drivers were properly positioned in certain places, at certain times, on certain days, was crucial to this.
“There’s a lot of planning ahead. We know traffic is bad on Friday night and we’re going to get a spike in users at this restaurant after this time, so be prepared,” he said.
It is not only the areas it operates in that Yum – which has around 70 restaurants selling food on the platform – is selective about.
“We are selective about the restaurants that go on Yum. We need to know that they offer incredible customer service that people already want or that they have items that will appeal to our customers,” Frazer said, adding the company often only posted some items from a certain restaurant on the site.
“It is better to divert customers to exactly what you know they might buy.”
According to Frazer, for the most part all of the restaurants have been happy with Yum.
“They are on board. They see it as a clear way for them to reach more customers and as a value add to their existing customers. The restaurant owners understand that for them to market well they need to be in people’s homes,” he said, adding that the fact the delivery drivers were all employed directly by the startup also helps.
“I think that is one of the big selling points for restaurants. We own all the bikes and they are all equipped with GPS.”
If the market is tight now with Yum and hellofood fighting for space, Frazer believes it is one that is always growing as internet access in Kenya continues to rise.
“I think as more and more people have access to internet it allows them a whole different way to explore their surroundings,” he said.
“I guess people get more familiar with using the internet outside of work or school. As more and more advance from university to the working world they are going to see the internet as the ability to acquire services as well as information.”
Yum has received funding in the past, but Frazer says though they are always looking for more investment they are also trying to become self-sufficient.
With this in mind, Yum is trying out some alternative delivery services to broaden its appeal, recently partnering with grocery firm Zucchini to deliver people’s shopping to their doors.
“We’re trying to really push supermarket delivery,” Frazer said, though he stresses restaurants remain the company’s major focus.
Nevertheless, a food delivery startup that is also making tentative steps to become Kenya’s version of Supermart.ng? There could be interesting times ahead.
