Delivering Information with Zhong Xu

Delivering Information with Zhong Xu
January 16, 2020 Adam Stead
~ read | In Interviews
deliverect fetured image

Deliverect is a start-up from Belgium by cofounders Zhong Xu and Jan Hollez in 2018, which hopes of making things simpler for restaurateurs. 

The premise of the business is simple. Presently, restaurateurs need an array of software products to manage their business, which produce masses and masses of information. That information is a mess. And whether it’s delivery platforms, online ordering systems, or EPOS software… it would be easier to put it all in one place.

Deliverect hopes to be that place. 

Deliverect is “gateway software” which means that, where softwares talk to each other, Deliverect sometimes acts as translator. It’s also its own dashboard, in which you can understand both sides of your business in a single place. Deliverect’s hope is that by doing the legwork of integrating, they will be able to scope out a permanent spot on the software landscape and build out their own customer base. 

Will they be successful? And can they actually help, or do they just risk becoming another log in and another screen and another monthly fee? 

We dispatched Adam Stead to meet Zhong Xu, to find out.

 

Deliverect for businesses 

We asked Zhong to explain Deliverect in his own words. 

‘You could see it as a gateway between two very fragmented worlds’, he said. One of those worlds is ‘delivery channels like Deliveroo, UberEats, Just Eat, maybe Google, or your own pickup sites.’ 

‘We link them up into your point of sales,’ explained Zhong. So that best of all, ‘there’s no more manual key ins.’

With multiple tablets and ordering systems, ‘It’s like playing a game of whack-a-mole because you have 100 orders coming in by tablet. It’s like, “Oh, the left one, let me see that. Oh, the right one is beeping.”

But Deliverect doesn’t want to market itself as merely a hassle-saver. Rather, Zhong was focused on a grander goal for his customers. 

‘The delivery world is quite fragmented because there is a lot of players in that field, but you need to be on a lot of platforms to generate income,’ argued Zhong.

‘Each of these delivery companies will increment your delivery sales,’ he explained. ‘I think a restaurant that has a quick-serve, or a mid-size restaurant, will have about 30 to more than 30% of their total revenue going to deliveries.’

Which means that, with Deliverect, ‘restaurateurs can almost double their delivery revenue year after year, and not only because they have great food, but because they have multi channels and they’re managing it.’ 

‘It’s a daunting task’, says Zhong. But made easier by using Deliverect. 

 

deliver food packets

Delivering Change 

That’s the pitch. 

But looking at delivery from the perspective of a brick-and-mortar restaurant looking to sell more online is only one side of the phenomenon of “delivery” as it exists, in tech, today. 

It has not been the focus of food delivery companies to increase the revenue of restaurants. The goal, and the goal of billions of dollars of venture capital money, has been to fundamentally alter the way we eat in cities. This has changed restaurants, and will continue to change restaurants, not always in pleasant ways. 

Another way of dealing with these ‘fragmented’ worlds is simply to just cut them up entirely – have a couple of restaurant kitchens for restaurant orders, and a bunch of ghost kitchens for online orders. 

‘Ghost kitchens are really popping up’, says Zhong. Ghost kitchens are kitchens exclusively for fulfilling food delivery orders; they cut the costs associated with brick-and-mortar customers. 

‘A restaurant costs…around £300-350K to offset it, design, and everything, while a kitchen can do it for £60-70k, because you don’t need a design and all that. The investment is lower, so the payback is quicker…That’s definitely interesting and that’s where you see a big evolution towards it, but I think what’s important is that only works still if you have a strong brand.’

‘There’s a very big trend where people think, “okay why don’t we just set up those kitchens, launch our own brand, and make it happen?” I think that time has already passed.’

‘What you need to do is have two strategies. On one side you need to build your brand. You still need to have these real restaurants, experience centres.’ Then, by setting up delivery kitchens, you don’t need to ‘burden your local operation side’ by paying the extra £280K for a full kitchen. 

That requires a sophisticated strategy and a fair bit of cash. I recounted an experience at a recent UK curry industry event at which delivery platforms in which restaurateurs spent a long time railing against big delivery businesses. 

‘I think that it’s a necessary evil’, said Zhong. ‘You have the same in the hotel industry where the bases are…disrupted by booking platforms. Nobody ever, well rarely, never calls a hotel to make a booking.’ 

On the plus side, argued Zhong, he imagined a brighter future for merchants using delivery. Deliverect sees the restaurant industry undergoing a real sea change – one where ‘delivery is really a commodity. Getting food from A to B…Delivery companies have set a way of showing this is a viable model, it’s worth it, people do it.’

Zhong sees big tech linking up with delivery platforms to create even more channels for hungry people to order from. With Google ordering in the US, ‘you can already also just order the food, click “send me it,” and that’s it…it’s also incorporated in Alexa, or your voice ordering, or Google Echo.’ Facebook. Instagram. 

‘Retail is not just Amazon anymore, it’s not just Alibaba anymore. You can order it on Google, you can order it on your shop. You have Shopify. There’s a lot of, a lot of channels that you would use.’ 

What does this mean for restaurants?

‘You need to be prepared for this avalanche of online channels, and both the niche players and massive companies will want to provide that…it’s key to be able to do that on multi-channels because each of these channels will generate sales.’

 

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Strength Through Relationships 

Whatever the food delivery market looks like in the end, Deliverect is currently growing at a fair clip. 

Their early success has come from the speed with which they’ve onboarded a suite of partners. ‘We pretty much work with every big platform across Europe,’ said Zhong. ‘On the point-of-sales side, we are part of over 30 point-of-sales… we work with Square, Lightspeed, to NCR, and old-school [non-cloud] point-of-sales. We cover pretty much the spectrum.’ 

But what if the POS companies begin to integrate directly? Deliverect would be disintermediated.

Zhong shook his head. ‘It’s not a core focus for a point of sale company to do all these hundreds of hundreds of delivery channels, especially if you’re across multiple regions.’ 

And integration with multiple delivery platforms is what customers are looking for: 

‘If you’re a restaurant and you’re only on one platform, it de facto means you will lose out on certain benefits, and that’s why a restaurant wants to have multi-channels.’ 

‘And this forces a point of sale company also to say, “actually, we don’t want you to have one channel integrated, we want you to have all these multiple channels integrated.”’ 

‘This level of complexity is the reason why we can exist’ said Zhong. 

For Zhong, the numbers make it obvious that the answer should be to get on as many channels as possible. ‘Although it is indeed costly, your fifth cost is then still distributed over more sales, so you’re still making a profit.’ 

‘Each of these delivery companies will increment your delivery sales. I think a QSR or a mid-size restaurant will have about 30 to more than 30% of their total revenue going to deliveries.’ 

Growing up in the restaurant space 

Zhong is a well-established innovator within the POS business. He developed one of the first iPad POS systems, POSIOS, which eventually became “Lightspeed Restaurant” when it was bought by Lightspeed. 

But even before this, Zhong was growing up in restaurants where his father started up a point of sale in Ghent. At 16, Zhong said, ‘I thought, “man, these point of sales are so old-school. It’s very tedious, it’s intolerable to run this. I never want to take this thing over.” 

Then when iPads came onto the scene, Zhong saw an opportunity to move things ahead: “this is perfect. I don’t need to go to these restaurants anymore to enter the menus. I can go remote because it’s Cloud-based.” 

The same impulse drove Zhong to build Deliverect. ‘We are not doing it because we thought this is a magical idea. Often, we have thousands of restaurants saying to me, “John, can you fix this nightmare for us?” And then once we do it, what I do is I go around the table, “Let’s find a solution that exists so that we can help them,” and when you find out there’s no solution that exists because it’s not that easy to do…you say “okay, let’s fix it.” 

By linking up their POS and their online channels, Deliverect is helping ease the pain restaurants feel in spreading across multiple delivery platforms.

If you’re not sure what the best technology set-up could be for your restaurant, book a call with StoreKit and we can talk you through the good and the bad of EPOS for takeaway, online ordering systems, and gateway software like Deliverect. 

 

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