Deliveroo Hong Kong has announced a 15-20% discount in commission fees for its restaurant and wine merchant partners to support them as numbers of dine-in customers fall due to the coronavirus situation.
Due to the impact brought by Covid-19, the Hong Kong government has imposed school closures until 16 March and extend the work from home arrangement for civil servants for another week until 23 February.
As per official advice, a number of local offices have followed the government’s lead or minimised employees’ office working hours.
Because of the special arrangement and also public concerns relating to Covid-19, normally congested streets around the city have become nearly empty, which has contributed to a severe downturn in the local food and beverage industry.
As large portions of Hong Kong locals continue to work from home, Deliveroo is reporting a significant increase in delivery orders. The food delivery leader has reportedly seen a 60% increase in order volumes month-on-month in January, with the pace of volume growth dramatically accelerating over the past two weeks since February began.
For vendors tagged with “alcohol”, this refers to wine cellars or restaurants selling alcoholic beverage, the growth hit 50% in the past two weeks, meanwhile during Chinese New Year it went up to 60%.
As numbers of customers dining out fall, Deliveroo has announced measures to support the industry, including a 15-20% discount in commission fees as well as a four-week payment delay scheme available for qualifying partners in order to ease their cash flow.
Brian Lo, general manager of Deliveroo Hong Kong and board director of the HK Federation of Restaurants and Related Trades (HKFORT), said: “In our most recent survey and conversations with leaders of the F&B industry, we estimate in-store F&B retail sales to be down 30-50% year on year, with signs of further deterioration. Operators are reeling from worsening consumer spending out-of-home.
“We expect economic conditions to deteriorate. Having spoken to so many restaurants, we understand their concerns and wanted to take action to help. We invite others in the food delivery sector to follow our lead and also provide support where they can. Introducing the commission rate discount to every one of our restaurant partners is yet another way that we can help our valued F&B partners at this time.”
Deliveroo saw a dramatic acceleration of restaurants looking to suspend or close operations, with the benchmark numbers rising from an average of 1.5% to ~5% over the last four weeks. This data helped spur the company to take immediate and decisive action.
“We’re doing everything we can to ensure that our restaurant partners are well-supported, and that people across the city are staying well-cared-for and well-fed at this critical time,” said Lo.
Currently, Deliveroo Hong Kong has close to 6,000 restaurant partners.