AirAsia’s food delivery service to debut in Singapore in March promising lower commissions for F&B firms

SINGAPORE, Feb 18 — Close to a year after owners of struggling food-and-beverage outlets here campaigned to pay lower commissions to food delivery platforms such as GrabFood, a new player is breaking into the market, promising far lower commissions.

In a press statement today, Malaysian budget airline AirAsia said that its latest venture, AirAsia Food, is expanding to Singapore, and that it would charge merchants a commission of 15 per cent on each transaction.

TODAY understands that commissions charged by the three major food delivery platforms here, GrabFood, Foodpanda and Deliveroo, range between 25 and 35 per cent.

And in a campaign to woo merchants onto its platform ahead of its target launch date, in the first week of March, AirAsia said that merchants joining before March 1 would receive a special sign-on rate from as low as 8 per cent for the month of March.

Merchants can go live within 48 hours of registration, once the service is up and running, it added.

Consumers here can start ordering food deliveries on AirAsia Food’s platform from the first week of March, its spokesperson said in response to TODAY’s query.

AirAsia Food, which started operating in Klang Valley, Kuala Lumpur last May, is still expanding to more Malaysian cities and is still a small player in Malaysia so far.

Last December, AirAsia Group’s chief executive Tony Fernandes told Malaysian newspaper New Straits Times that it was fulfilling 1,000 food deliveries a day, while the “big boys” were fulfilling 55,000 deliveries a day.

He then indicated his aim to ramp daily deliveries up to 10,000 by end-March.

AirAsia’s press release today came a day after Fernandes took to LinkedIn to say that AirAsia Food is coming to Singapore “with a roar”.

In the post, Fernandes said: “As a disruptive leader, we’re ready to take on the new challenge in Singapore, providing value, simplicity and inclusivity for everyone.

“Sceptics and naysayers who’d said we’ll never make it in the airline industry — took me seven years to get approval to fly to Singapore but better late than never. So I’d say we’re way ahead of schedule on food.”

Meanwhile, in the post’s comments section, he agreed with a statement that other food delivery platforms are taking too much in commissions, and said: “That’s why we are coming in lower.”

Fernandes’ post came just a few days after Malaysian news outlet The Star reported that AirAsia Food would expand out of the Klang Valley area to other major Malaysian cities, starting with Johor and Penang in March.

In that report published on February 15, AirAsia Malaysia chief executive officer Riad Asmat was quoted as saying that the company is also aiming for a presence in Indonesia, the Philippines and Thailand.

Within Malaysia, the cities of Ipoh, Kota Kinabalu, Kuching, Miri and Kota Bharu are the next potential markets, he added.

Currently, AirAsia food offers unlimited free delivery within a delivery radius of 15km and a commission rate of 10 per cent in Malaysia.

TODAY has asked AirAsia whether free deliveries would be rolled out in Singapore as well, and made further queries on its commission model. — TODAY