Getting the ticket

Having set up in 2011, and now celebrating six years with its pioneer platformin the MSAR, Aesom Lei, the CEO of iFood Macau. iFood Macau, an e-commerce platform for restaurants in the city with over 380,000 downloads of its app, tells Business Daily about working in the MSAR, holding your ground, what being an entrepreneur is all about and the iFood Awards

How has the progression been? Has it been difficult at certain points?
Every time, in different situations and with different challenges, every day is very hard.

How has the Internet changed your business?
In the beginning, we just worked like an advertising company, and continued with the development, arriving at e-commerce. In the beginning, we just worked with the restaurants to provide them a service, making menus, helping to update their information on our apps and so on.
Now that we’re doing e-commerce we’ve made a platform – iFood app is a platform, to help restaurants to actually get business from our apps. Not only a B2B (business to business), it’s also B2C (business to customer) now.
Anybody, a citizen, a visitor, can make an order from our app. It will go through the Internet to the restaurant, they receive the bill, make the dish and have it ready for the customer, and the user makes the payment through the platform. That’s the difference between before and now.

For the user to make the payment, do you accept all cashless payment forms?
At this moment, we do everything we need to in order to follow the government policy 100 per cent. At the beginning of September we’ll accept Visa, Mastercard, UnionPay, Macau Pass, Alipay, WeChat Pay and so on. September this year.

Is there more competition in the market now than when you launched iFood?
I think it’s not more difficult, because last year some of the officials from the Chinese government visited Macau to give Macau advice or orders. They said – okay now you can make e-commerce, and then we followed the structure to do that. Before Macau was a gambling and travel city, because the money transport (laundering) is a very sensitive issue here.
So before last year, e-commerce in Macau was not very active. The banks would keep the controls very tight. So the government departments and the banks opened the door.

Now, how often do you talk with the government?
I think we talked to every department this year. We also like to visit each other about every three months.

Do they give you guidelines based on what they’re doing?
Not really, they just try to help and we sometimes visit them to tell them what we’re planning to launch and ask what they think. They say ‘good, keep going on and do you need any help?’

Will Macau becoming a smart city help your business?
It will help and we also joined this project, because we have another project with CTM to set up the public WiFi for the city. So when we’re talking about Smart City – a Smart City must have WiFi. No matter whether it’s a restaurant, on the street and in public places like the airport, the ferry terminal – it must have WiFi for the citizens or travellers.

How does the agreement work?
Because iFood Macau has over 1,300 merchant members, we set up a program called CTM iFood WiFi. Then we go to the restaurants to talk to the owners and the management to explain the Smart City concept, the differences between public WiFi and company WiFi. We need to give them the information – how, why – because some restaurants say ‘Oh I have WiFi, I’ll share the WiFi with our guests’. That is not safe. We need to explain the hardware needed to support the public mass.
Especially for safety – so internal is for their operations and public WiFi is for the guests. We go to the restaurants, as our daily routine of talking to the restaurant owners and management about the project, and when they agree, we communicate with CTM for CTM to help them set it up.

Does the restaurant get a discount then on WiFi fees? Is it free?
CTM will offer them a very reasonable price to help them to separate the private and public WiFi.

Is there any limit on the agreement, say for one year or two years?
I think there’s no end because the agreement is automatically continued.

The iFood awards, how is it working?
We use WeChat, so you can go and vote on Restaurant – press the button and vote. It has the restaurant’s name, for example ‘I love foreign restaurants’ so say a Hong Kong restaurant or U.S. brand comes and opens in Macau. Then there’s one for a Chinese dish, dim sum, noodles, congee, barbeque pork chop, hotpot, Japanese dish, Korean dish. They can vote on each one. And then there are categories of the special dishes, because every restaurant has their signature dish. You can vote on that.

Is it by points or by how many people vote?
By the number of people.

Why did you decide to do it by category instead of just people voting for restaurants?
Because this year we would like to choose 12 of the most famous dishes of Macau to tell the world about.

Does the dish have to be from Macau? Or can it originate somewhere else but is being made in Macau?
Dishes that are being made in Macau, the original recipe doesn’t have to be from Macau. Mainly it’s the signature dish of the particular restaurant.

With the awards, what can the companies win and how do you promote them after they win?
We have many ways to do it. After they win, we have the ceremony which we’ll hold at MFE (Macao Franchise Expo), July 29. Then we’ll give them award certificates and post on our social network and like last year, the companies show up in the media. They post the certificates in their venues. We also bring the merchants to different kinds of exhibitions to take them out of Macau, so they can promote themselves outside of Macau.

For those exhibitions, how often do you participate normally and how do you decide which companies to take?
We join the exhibitions that we think have potential, like the government ones: MFE, MIF (Macau International Trade and Investment Fair). And some of the private companies which make exhibitions that are large, we attend.

What about the SME business matching activities that the gaming operators are holding? Do you encourage companies to participate in those also?
We do.

Does iFood have a physical product?
Yes, the club card. There’s more than 400 restaurants that give us the largest in-store discount, so you take the card with you for the discount. The digital version of the card we’ll connect together with our app very soon, so no matter whether you’re using the card or the app, it’s the same.

How many downloads of the app do you have so far?
About 380,000 downloads in Macau. Almost everybody.

How soon are you thinking to make an English language version?
We are already planning to do the English version, but there’s one main challenge. You have to use the specific names of the dishes, which aren’t directly translatable. So for our English version we cannot translate the real meaning of the restaurant’s name or dish, otherwise nobody will understand.

Of the restaurants that you partner with, how many already have English menus?
I think no more than 10 per cent. The reason is that it depends on the owner’s business strategy. For example, if I have a restaurant in Taipa, of course I’m looking for foreign clients. So many foreigners are working in casinos or big companies that don’t understand Chinese and need a menu. So when I set up a restaurant I need this type of customer, and need to make an English menu.
But on Macau peninsula, some of them they haven’t thought about it yet and haven’t made English menus. Especially in the old areas.
We also help the restaurants to design menus, so if the company needs English we help them to translate. We have this service, but we won’t tell them ‘hey you need to make an English menu’.
Translating dishes into English is also quite difficult. We can’t just randomly translate on Google, it needs to be done by a professional.
With a menu that isn’t translated by a professional it’s always a joke.
For example there’s a dish that is a salty egg that’s blended and mixed with pork rib. If you directly translate it it’s ‘gold sand bone’. Gold, sand and bone together, what the hell?

You see the amount of restaurants that open and that close. Are there as many opening as closing? How long can a restaurant stay open in Macau?
Actually every day there are restaurants opening and restaurants closing. I think maybe not more than 15 per cent can stay more than two years in operation, for new companies. They close because of many reasons. I think the government by itself can’t help everything.
I always go to the universities to talk about this topic. I think to be a young entrepreneur depends on your DNA. Not everybody can do it.
Some entrepreneurs, we work many years to gather some money to try to start up a business. This is a kind of entrepreneur. The other one – goes back to their company, says ‘father, papa, mama give me money’. ‘Okay I’ll give you 3 billion, try to do it.’ This is also an entrepreneur. Both of them are entrepreneurs but they’re very different.
Like so many young people in Macau, they put their money together to make a restaurant and have many problems.
First, market research. Second, not many people know about how to manage relationships and work. Whether the business is going up or going down, the founders are friends, they have to understand ‘oh this month we didn’t make money, you’re always not in the office, you have your own job, you’re not always helping. I’m in the restaurant everyday I work very hard, where are you guys?’
They need training, they need to have a meeting at the beginning and divide the roles and the management. They don’t know how to separate who is in charge of what. They just say ‘you’re the boss, I’m the boss, you’re the boss’.

Are university graduates here prepared for the workforce?
No. There are so many things you can’t learn at school. Even the professors maybe haven’t started their own businesses before. How can they learn? They can only learn from practice, from real life.
I would really suggest for them to go work first. If you don’t know how to be a solider, how can you be a general? If you’ve never used your weapon before, you can’t go to war. So go to work first to understand.
If you understand how to be an employee then you understand how to be an employer. Work first, don’t just leave school and say ‘oh I learned many things from school, I’ll ask my papa to give me money’ (laughs).

How many of the restaurants that you were with are family owned businesses?
Ten years ago many were family style restaurants. But nowadays they’re more like company style. But family style still exist, just not many now.

Do you think the family restaurants are primarily in restaurants they own?
Yes, some of them yes. For example on the street you see some companies and think ‘how can they stay alive on this street?’ You’re selling nails, on this main street you’re selling nails? You’re selling iron? You can stay here because 30 years ago they already owned the properties. That’s the reason why. Maybe 30 years they have owned the property; they’re a very happy, family business. If you talk to them, tell them that if they would move back to their home and rented the property out, they would earn more. But they say ‘No, I need to work, I need to work in this way. This is my life. Not because of money.’

With the rising rents, family businesses are being replaced by large chains like Chow Tai Fook. As a business person, do you think that this change is good or bad for Macau?
I don’t think it’s good or bad. Because this is the evolution of Macau. You have no choice to say yes or no. You cannot stop it no matter whether you like it or not. It’s still going to happen.
Like Senado Square, of course family businesses, small businesses got kicked out and then some property owners rented the stores to Swarovsky or Koi Kei to rent to someone to conduct their business. You cannot stop it. You cannot stop the property going from very cheap to very expensive. The light must go on, society must go on, to develop like this. Like in a family in Tokyo – the grandfather buys the house, the grandson finally pays off the mortgage of the house loan. What do they feel? They feel nothing, it’s normal. It’s natural.
Compare Macau and Hong Kong, Hong Kong people are like this also. Macau and Zhuhai, Zhuhai people are the same as this.
If you’re powerful enough, you stay in the city. If you’re not powerful enough, you leave the city to go to another place.

A lot of the population has already moved to Zhuhai. Do you think Macau is going to become just for tourists and business people?
I think some of the local people love their place. No matter what they will try their best to stay in their own place. Like me, like many people. ‘Can’t you just go to Zhuhai, go to China to buy a cheaper house to move?’ No. Because we are Macau people. Our children need to study here, so we need to have a house here. We need to stay here.

For iFood, will the new Hong Kong-Zhuhai-Macau bridge change your business model? Will you need to focus more on incoming tourists, in particular from Hong Kong?
I think no matter what changes to the city, no matter whether it’s the bridge or what, the only thing that’s needed is to be a leader of this industry. That’s how we’re always thinking. We need to keep our company as a leader in this industry.

Do you think the bridge will bring more competition from Hong Kong?
I think so. Yes.

Are you worried?
No. Never.

What other online strategies do you apply?
We also have a game, which in Macau is very popular. We do this game almost every week. For this one we offer 300 cocktails for free, if you win you can use the coupon for a free drink. You take that to the restaurant, show the coupon and win a cocktail. They input the password, redeem the coupon and give you the free cocktail.

There’s a lot of footwork involved in establishing and maintaining the restaurant network. How many people do you have working for you?
In this office, in Macau we have 15 people. Every day. They’re in different departments, some making menus, some doing the editorial, some doing interviews, some with customer service and promotion.

Are you thinking about Zhuhai and Hong Kong?
Yes, we have a company in Zhuhai but we must focus on Macau, because there are so many things that we can develop. Online ordering, we connected to the banks so we’re doing e-commerce.
I’ll try and explain: You have a restaurant and your restaurant has many end users that order the food from iFood. Then I charge them a certain amount of money, but I’m not paying straight out to the company, maybe I’ll give it to you 10 days later. And the money will stay in my group, accumulating in the bank account. Why are we doing this? Because one day we can go to the stock market. I collect money in the group, then give back to the thousand restaurants ten days later, and collect interest.
That is only one type of the business.
The other is I give you business, design the menu, update it for you. If you don’t have enough employees, I’ll find them for you. We offer many paid services to you and we also cooperate with so many companies like CTM, Macau Pass, Coca-Cola, and they give you commission. So we have this income.
And later, your restaurant needs supply: chicken, beef, many things. I cooperate with the supplier to connect it together. And the supplier gives you a commission. For example, I introduce 500 restaurants to this store to buy the chicken, so I sign the contract with them as iFood.
In Macau, the market is still very deep, very deep, especially in Macau.

Tell us about Macau.
Macau is a very dark place. Monopolies owning electricity, water, transportation. If you are a foreigner you think ‘oh transportation is transportation. The car transport in Macau is a car company.’ No, so many things are controlled by a few people. But, I think these few hundred years in Macau, I studied the history, I know it’s changed little by little. Three hundred years ago in Macau they only had toy manufacturing, gambling, fireworks and sex. Twenty years ago, Sands comes to Macau in 2002 and the gambling industry is more competitive. Property goes up.
So, in this society, in every generation the power and the money have changed a little bit. And this generation is e-commerce.

Do you think this generation will change more quickly because of the Internet? Will it change quicker than it has in the past 300 years?
In Macau? No. Monopolies will still exist. Because they will build up a firewall.
Look at Uber. International, every country, even China, Macau says they cannot. They started to call the phone for the taxi, now they have made the app and bought new taxis.
So what am I waiting for? I hope to be the next generation of monopoly. Or play together with the monopoly. We hope to get a ticket.