The article is contributed by Hu Aimin, currently the founder and CEO of iMin Technology.
- The development trend of the global catering industry
People who are in Singapore or who frequently travel to and from Singapore should notice the trend of restaurant franchises. In many malls, you see similar brands.
And Singapore’s business community has been bringing this to capitals in the region, as well as China. Brands like BreadTalk, Food Republic, Putien, etc. are household names in major Chinese cities.
Strolling around malls in Southeast Asia’s capital, you can easily develop a misconception that restaurant chains are a key feature of Southeast Asia’s F&B scene.
Nonetheless, we feel that this is just the beginning of a trend. The Food Delivery Platforms in SEA Report from Momentum Works mentioned that franchises only account for 13% of the total number of restaurants in the region, versus 37% in North America and 22% in the Middle East.
This number will surely go up, especially recently I have seen a number of friends from various international F&B groups that came here to actively look for M&A opportunities in the region.
With the development of the mobile Internet and the continuous improvement of infrastructure, Southeast Asian F&B and retail companies as a whole will gradually move towards not only chained but also connected (virtually) and digitized.
We have seen something similar in China. After all, the competitiveness of chained restaurants will be stronger compared to individual ones, and the economy of scale is higher with better risk tolerance.
However, a key challenge for restaurant chain owners is how to manage their businesses effectively. A keep part will be standardized, digital processes, and data. POS systems are an important, integral part of that process.
For example, Meituan’s whole chain built around F&B establishments in China uses delivery services as a key enabler, POS systems as data core, and payment/financial services as future possibilities.
In Southeast Asia, because of the complexity of F&B and retail systems, the POS systems in various countries are also very diverse (and non-standardized). From the recent rapid development of food delivery to the recent funding of various bookkeeping startups in Indonesia, we see many have realized the opportunities in this market.
2. The evolution of POS machines and ecological changes
F&B and retail in the Southeast Asian market have their own complexities, and success cannot be achieved simply by copying a system or business model from a more developed market. Let’s give a quick review of the history of POS/
Before the advent of electronic POS, traditional cash drawers and paper-based accounting systems were the most common. Some related history can be learned from the following ad by Singapore’s UOB:
In order to better keep accounts and improve efficiency, the first electronic POS machine was invented in Japan in the 1960s. An early POS device was actually a computer with a printer, cash drawer, etc. Later, it gradually evolved into an all-in-one machine with a touch screen.
For a long time, the touch screen all-in-one machine usually used Intel processor and the Windows operating system. With the popularization of smart hardware devices, some merchants will also use smaller and lighter iPads to form a POS system with cash register system software; currently, smart POS machines based on the Android system have become the first choice of many merchants.
The advantages of Android as an open-source system are obvious. Compared with Windows, which requires a fee, or IOS which is a closed ecosystem, Android devices are more convenient to use, have a wider range of applications, and incur relatively lower development and maintenance costs.
3. Opportunities and Challenges Brought by the Mobile Internet
In recent years, the rapid development of the mobile internet has led to the rapid rise of industries such as mobile payment and food delivery. While greatly facilitating users, it also brings new challenges to traditional industries. Taking mobile payment as an example, the popularity of smartphones allows consumers to complete the payment process with only their phone.
It can be said that the evolution of payment use cases has promoted merchants’ demand for smart POS machines, but this has had a great impact on traditional financial industry players.
Smartphones provide users with a wealth of applications, and businesses can also use smart devices to complete processes with customized apps. However, ordinary smartphones are not very suitable as a tool for merchants to use at the point of sale. Therefore, various smart devices such as smart POS machines have become the primary choice of merchants’ applications. , On the one hand, having customized functions such as printing and scanning can improve the efficiency of business operations; on the other hand, production and maintenance costs are lower and management is more convenient.
With low cost, convenience, and flexibility, the aforementioned Android system has great advantages. You can see that in recent years, the traditional all-in-one machines that are either black or white have been increasingly replaced by colorful Android all-in-ones devices:
During the COVID-19 pandemic, the application of commercial IoT, including smart POS,
has further improved. First, the pandemic prompted merchants to take the initiative to adopt new digital technologies. The rapid growth of food delivery platforms at this stage has also rapidly promoted the demand for smart POS machines.
Second, with connected commercial IoTs, users can install and update software, or manage and maintain equipment remotely, and technical support personnel can also provide remote assistance to help users solve problems.
4. Adapt the experience from China
In general, China’s fast commercial IoT development, underpinned by the country’s mobile payment, food delivery and new retail/local services, gives companies in Southeast Asia a lot of experience to learn from. In addition, China’s strong manufacturing capabilities also enable smart POS companies like us to very quickly grow and iterate our products.
However, for companies in the smart POS machine industry, they need to pay full attention to the differences between markets. These differences are in terms of consumption habits, market environment, and mobile Internet development. While the underlying devices might be similar, the applications and the whole business operations need to be dedicated to each market.
Here, it is more important to observe and understand user needs, respond quickly to the market and formulate practical plans in a timely manner in the fragmented Southeast Asian market.
At the same time, we also need to appreciate the potential of these markets. For a long period of time, players in related industries can work together to grow the market, while enjoying a healthy competition.