Cloud Kitchens Poised to Grow in Indonesia

Aug 2021

Due to the Covid-19 pandemic, Indonesia has witnessed a series of lockdowns and social restrictions which prompted as many as 1,600 food establishments to close their doors. The F&B industry has responded by growing online channels, while the rise of food delivery prompted the growth of cloud kitchen models.

In Indonesia, cloud kitchens are poised to grow at a CAGR of 20.7% from 2021 to 2028. The country boasts the largest gross merchandise value in  Southeast Asia’s region (USD 3.7 billion in 2020), followed by Singapore (USD 2.8 billion) and Thailand (USD 2.4 billion).

The concept of cloud kitchen was first introduced in Indonesia by Grab in 2018 through its GrabKitchen pilot. Currently, the players in the market have grown to include Gojek, Everplate Kitchens, Hangry, DishServe and Daily box.

The majority of cloud kitchen operators obtain revenue in the form of rent or revenue-sharing. An additional revenue source is the purchase of data by merchants to help with their business strategies. While these cloud kitchens have relatively lower costs on rent and staff, their marketing budgets are potentially higher because new merchants need to invest in digital marketing and advertisements to increase their visibility among competitions. Also, it is possible that cloud kitchen operators consider adopting a hybrid model, in light of the returning demand for dine-in facilities as the country brings the Covid-19 pandemic under control.

(Source: KrASIA)

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