Brunch

Transforming the food delivery industry from within

  • Nirthaj Seelanatha on YouFoodie, Sri Lanka’s latest entrant to the food delivery market

The pandemic has seen delivery platforms (food and otherwise) become something of a lifeline in times of lockdown and travel restrictions. It has undoubtedly become a big market, and it is likely to stay that way as we move into a post-pandemic world. 

Sri Lanka’s delivery platform market is dominated by a couple of giants, local and international, and a few smaller home-grown delivery platforms. YouFoodie is arguably the newest delivery platform to enter the market, having been launched in January 2021. YouFoodie is owned by VirTrans Capital, the holdings company that is also responsible for the taxi operation YouCab and the online logistics platform SyTrans. 

What sets YouFoodie apart is the responsibility that is ingrained with YouFoodie’s culture and team. Brunch chatted with VirTrans Capital CEO Nirthaj Seelanatha for more insight into this remarkable home-grown delivery platform. 

A unique value proposition

YouFoodie as a concept was something that had been in the works since VirTrans Capital launched its taxi service YouCab in 2019. To Seelanatha, there existed a natural expansion opportunity into delivery, but this was something that would have taken place a few years down the road if not for the pandemic. “When the first lockdown happened, our YouCab corporate clients called us and asked, ‘Can you help us with our goods?’” Seelanatha shared, adding that this need from their clients (YouCab has many corporate clients under its umbrella) drove them to launch YouFoodie. “That’s where we started. We did quite a lot of deliveries and then came up with the app, launching and doing the pilot project in Kandy. Thereafter we saw the potential and got it out islandwide.” 

One of the key aspects that sets YouFoodie apart is the fact that they conduct direct deliveries on behalf of their restaurant partners that are not limited to orders made by consumers through the app, allowing restaurants to get all orders, including orders they receive directly as a business, delivered. Another one of YouFoodie’s unique value propositions is that they only charge a commission rate of 15%-18% as opposed to other platforms that charge in the range of 30%-40%.  

Seelanatha shared that this reduced commission scheme has not been without its challenges, explaining that in a market that has become accustomed to a much higher commission scheme, YouFoodie has experienced issues, ranging from some restaurants not being able to adjust their computer systems to be able to accommodate a commission rate of 15%-18%, to other platforms intimidating restaurants into not doing business with them. 

As a player in the marketplace, Seelanatha shared that it is his firm belief that the market is in need of regularising, from commission schemes to food hygiene and safety. 

Another key aspect that makes YouFoodie a stand-out in the market is the fact that it’s 100% homegrown, in a market that sees much of its business from platforms that are not Sri Lankan and do not contribute to the Sri Lankan economy in the long term. “YouFoodie is a 110% owned company – we use Sri Lankan technology, and Sri Lankan based products (even our delivery bags and uniforms are locally made). We believe in Sri Lankan products and we believe in Sri Lankan people,” Seelanatha said, adding that YouFoodie is the only Sri Lankan delivery platform to have their own in-house customer service hotline. 

The challenges of building a mid-pandemic business

With the pandemic complicating things for the past year and a half, new businesses have to hit the ground running to truly make their mark. Seelanatha explained that this was no less true for YouFoodie, with one prime challenge being health and safety. Even outside the pandemic, responsibility has always been very important to Vir Trans Capital, with Seelanatha explaining that as CEO and a shareholder, he has frequently gone above and beyond on a personal level to make sure YouCab customers, both individual and corporate, have been kept safe from Covid-19, and he stressed that this was no less important for YouFoodie. 

YouFoodie produces its delivery bags (the big ones that riders carry on their motorbikes) locally, and replaces these regularly to make sure that these bags stay clean. Riders are also provided with Oxypura masks, gloves, and detergent to wash currency notes before handing them over to customers. Riders are also routinely given PCR tests to minimise the spread of Covid-19 should they have it.

YouFoodie also pays special attention to the needs of its riders, with Seelanatha explaining that they are stakeholders of the brand as much as customers. Working with its insurance company, YouFoodie has negotiated its own Covid-19 insurance policy for its riders so that even if they do get Covid-19, they can be guaranteed income until they recover. 

Outside of health and safety, the biggest challenge YouFoodie has faced is making sure the customer experience is flawless. “With food, it’s all about the first experience, unlike a taxi service where if something goes wrong, you can promote it and people will still try,” Seelanatha said. “But with food, if something goes wrong, especially the first time, people won’t believe in the product in the future.” 

Seelanatha also shared that YouFoodie needs to survive for five years to reach its true potential, and that a key factor in achieving this is the regularisation of the marketplace and business models within, something that the Government has also recently called for and Seelanatha wholeheartedly supports from a business standpoint. His support comes not just in terms of financial models, but in terms of business practices as well, explaining that a very concerning trend in the food delivery marketplace at present is the use of non-food safe packaging in a bid to be environmentally sustainable while also remaining competitive. 

Building a brand isn’t all about the bottom line

Having started earlier this year, YouFoodie has seen remarkable growth in the months that they have been active, even when compared to the traction the big delivery giants had when they first started their respective operations. “We compete with international brands who have thousands of designers and engineers to work on their app,” Seelanatha shared: “And when we look at it that way, we’re above expectations.”  

While going toe-to-toe with giants in the delivery market has been something of a high point, Seelanatha shared that it is not YouFoodie’s intention to outdo and outperform these giants. “We don’t really want to be number one,” he said. “We want to build recognition and believe in this brand, we want it to be the most reliable brand. Let the giants be, we want to focus on selective people who believe in our product and in Sri Lanka 100%.” 

On what comes next for the YouFoodie, Seelanatha shared exclusively that very soon (within the next four weeks or so), YouFoodie would be launching its very own in-house cloud kitchen, offering approximately eight cuisines including Sri Lankan, Chinese, Italian, Mongolian, Vietnamese, and Mediterranean. YouFoodie also has plans to engage with rural communities, especially with rural women, to provide them with an opportunity to supplement their incomes by taking on short deliveries within their areas to known parties during the day, but that this is a long-term plan still being worked on by the innovative minds at YouFoodie.