The difficulties restaurants face with big delivery platforms like Grubhub or Uber Eats have been extensively cataloged. Critics claim the platforms take too big a bite out of restaurants’ revenues, diminish restaurateurs’ abilities to develop direct relationships with customers and create logistical headaches as they come in to make pick-ups. And for small restaurants — those with a single location controlled by a single owner — the big delivery platforms present a unique problem, Chowbus CEO and co-founder Linxin Wen told PYMNTS in a recent conversation.
Wen, whose platform specializes in small Asian restaurants, said eateries with no name recognition beyond their neighborhoods have a hard time standing out on big delivery platforms that tend to favor large chains and well-known brands.
“The other big players always feature big chains, so small restaurants got a very few orders from other platforms,” Wen said. “They don’t benefit from the name recognition of a big chain, and that is just the reality. The best way for them to introduce themselves to customers is with their food itself. … That’s why we want to build this kind of a food-delivery platform — to serve those underserved restaurants.”
He hopes Chowbus will someday be the go-to food delivery platform for all independent restaurant owners that want to stand out better than they do now on the big platforms. Whether they sell Chinese, Mexican or Icelandic food, Wen hopes small eateries will make Chowbus the go-to platform for high-quality ethnic meals that customers might not otherwise easily discover on Uber Eats or Grubhub.
After all, Wen said Chowbus has endeavored from its earliest days to be different — because it had to be. For example, the four-year-old company didn’t have funds to burn in its early days for luxuries like marketing to lure away the typical delivery-order customer. Instead, Chowbus built itself for a different use case.
“When people think about food delivery, they have so many choices that many just end up with [whatever] platform gives them discounts,” Wen said. “We are trying to hit the customer who specifically wants authentic Asian food and a better way to discover and access it.”
“We don’t see a lot of competition in that lane,” he said. “We haven’t raised a lot of money. Instead, we’ve focused on building a very specific customer experience. We have the best restaurants, we have the most reliable service and those customers have come to like our product and choose us.”
And lately, customers are choosing Chowbus a lot more often — and bringing new friends along with them for the ride.
Wen said the platform was already seeing incredible growth in the pre-pandemic world, sparking 300 percent year-on-year gains during 2019. But COVID-19’s virtual shutdown of in-person dining nationwide has pushed the firm’s growth to closer to 800 percent for 2020.
Wen doesn’t think those gains will be temporary among either consumers who’ve embraced food delivery as part of their “dining out” repertoire or among restaurateurs looking to expand their business. He said that as more people try delivery instead of going out to eat, they realize it’s very convenient, often cheaper than dining out and a really enjoyable experience.
Wen added that restaurants are even in some cases making more money with delivery than they did with dine-in. He said COVID-19 didn’t start the food-delivery trend but has probably pulled progress forward by about five years.
And while Wen doesn’t expect the sector’s growth to carry on at a fever pitch forever, he thinks demand will only expand for delivery in general — and especially for platforms that connect consumers to quality restaurants.
“At the end of the day, customers are excited by this,” Wen said. “And as restaurants are trying it out, they are realizing they should do this forever because they are making decent money. And more importantly, they can reach to more customers than they ever have been able to.”
We’re always on the lookout for opportunities to partner with innovators and disruptors.
Learn More