Multiple Survival Channels for Penang’s F&B Sector

By Lim Sok Swan

November 2021 FEATURE
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The existing brick-and-mortar business model of Penang's F&B industry folded during Covid.
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THE MCO HAS taught Penang’s services industry many lessons, for example pursuing the plethora of available consumer channels, to onboarding digitally and quickly for survival. But with the existing business model in Penang’s F&B industry, food operators are also discovering these are much easier said than done. Most are tied to a contract for a set time period, not to mention the finances already funnelled into the remodelling of their business premises.

Ong Seng Keat of Yin’s Sourdough Bakery tried, with his tech expertise, to sell its baked goods online. This was 10 years ago when the bakery first set up shop at Balik Pulau. But response from the local market was lukewarm. “People were not familiar with buying things online yet; they had no confidence in the online bank transfer system.” So, the traditional brick-and-mortar business model, with a proper kitchen and a dining space at a strategic location, was ultimately decided on.

Ong tried again at digitalising the business last year during Covid, with an app and an online store. This time, it was a success. “The purpose of moving Yin’s Bakery online and introducing Yin’s Mart is to diversify revenue streams, and to help keep our employees on the payroll and maintain daily operations."

Customers on the app can access all four branches of Yin’s Bakery, of which three are based in Penang and one in KL, with its own team of bakers. Only its signature jams and granola are produced in Penang; these are then delivered to KL regularly.

Familiarising themselves with the virtual platform took a while for Yin’s staff, accustomed as they were to in-person interactions. For marketing to be more impactful, Ong integrated his app with the delivery services of Lalamove, and strategised different delivery packages and discounts. “More offers like these encourage customers to use the app to make purchases,” he says.

Super Star Koay Teow Soup along Lebuh Kimberley.

The husband-and-wife duo Chow Kim Peng and Vivian Poh are third-generation owners of Super Star Koay Teow Soup on Lebuh Kimberley. They do not mind the fact that some delivery platforms charge vendors a 30% fee, not when competition is getting fiercer by the day. “The larger platforms like Grab and Foodpanda have more delivery riders; food gets to the customers faster to guarantee satisfaction.” But the couple is also grateful for platforms like ordie.my, whose primary purpose is to help out Penang’s struggling F&B sector.

Pre-Covid, Super Star Koay Teow Soup operated between 3pm and 12am, but has since moved its business hours earlier, to cater to the lunch and dinner crowds. Popular dishes of braised chicken feet, gizzard and pork intestine are now sold as complete meals, with a bowl of koay teow or rice. Beverages and tong sui (Chinese dessert soups) are sold separately.

With the encouragement of their foreign customers, some of whom were China Airlines pilots and crew members, Chow and Poh experimented selling their braised chicken in vacuum packaging three years ago. They have since added other herbal food products alongside it on online platforms such as Shopee and Lazada. During delivery and to avoid spoilage, ice packs are included in the food packages which must be dispatched within three days. For this reason, the couple only engages the service of trusted couriers.

Chow and Poh sell their braised chicken, alongside other herbal food products, on platforms like Shopee and Lazada.

For out-of-state deliveries, Chow and Poh have sales agents in Kedah and KL, and the food items are delivered in refrigerated containers. The couple is also in talks with an online platform to widen distribution of their products to other countries.

Owner of Baozige (包子哥), Leong Chee Yan, relies heavily on organic shops in Seberang Perai, Kedah and KL for distribution of his handmade organic vegetarian Chinese buns. “I have at least five permanent distributors now; they have helped in boosting my sales. When orders at each place are relatively stable, the transportation fee is lowered,” says Leong, who started Baozige last year. With his logistics arrangement, Leong also helps out local vendors to widen their customer and revenue pool within Malaysia.

Leong relies on Facebook and WhatsApp to promote his baos.

Leong sees KL as the central location for expanding his business. "It’s the largest market in Malaysia. If I can make it there, I’d have even more of a chance to grow my business in Johor, Singapore and even beyond the Peninsula.” This promise anchors his focus to increase production as well as quality control. Observing how the tried-and-true F&B model folded during the pandemic, Leong prefers using social media, especially Facebook and WhatsApp, to promote his baos.

Lim Sok Swan

is currently focusing on heritage studies. She believes that more understanding among different groups and cultures can make Malaysia a better home for all.