Singapore' s Digital Start-Up Giants - Chope
How is Chope shaking up the F&B sector one city at a time? We dive into a case study of the popular seat reservation and queue management start-up.
Asian Insights Office, DBS Group Research
Chope is Singapore slang for “reserving” a seat or table. As its name suggests, Chope enables diners to make instant reservations across over 600 restaurants in Singapore, Hong Kong, Shanghai and Beijing. Chope provides diners with a hassle-free dining experience. It also helps restaurants improve their guest experience via seating and queue management technologies.
Last November, Chope acquired TickTok, a startup dealing in queue management systems, seeing it as a “perfect adjacent product complement” to its seating technologies.
Restaurants using Chope can now monitor both queues and reservations easily on an iPad app. Similarly, customers can check the number of people ahead of them and receive a notification when their turn arrives.
Monetisation Model: Direct
Chope’s revenue is mainly derived from their 600 participating restaurants. They each pay a monthly subscription fee for using Chope’s table management system, and a booking fee for each diner coming through their platform.
Chope’s 600 restaurant partners today represent twice the number they had just a year ago and quadruple that of 2011. Last July, Chope had more than 250,000 registered users across Singapore and Hong Kong and achieved its 10 millionth diner milestone. More users are expected with its recent expansion into Shanghai and Beijing.
How is Chope Different from its Competitors?
In the restaurant reservation space, the biggest global player is Opentable whose valuation is worth over US$2 billion. However they have different geographical focus. Chope boasts a listing of over 300 restaurants in Singapore whereas Opentable only has one.
The closest competitor locally is HungryGoWhere, which was acquired by SingTel back in 2012 for S$12 million. Chope has loftier regional expansion plans whereas HungryGoWhere is largely Singapore-focused.
Additionally, Chope’s investment in table and queue management technologies has set it apart from its competitors.
Chope plans to extend its geographic reach into Southeast Asian cities like Bangkok and Jakarta, where a strong food culture prevails. Chope is currently in four cities and is aiming to be operating in seven cities by its fourth birthday.
The second pillar of growth comes from “product adjacency”, which means selling different products to the same customers. An example is its acquisition of TickTok.
Chope also uses partnership building as a key growth strategy. Recently, Chope also tied up with travel website, TripAdvisor, to combine its booking engine with TripAdvisor’s user provided rankings.
a. Category leader: Not the clear leader. There are competing apps like HungryGoWhere.
b. Virality coefficient: Likely to be more than 1; based on its user growth numbers and extensive partnerships.
c. User engagement (DAU/MAU): Chope claims its customers are “extremely sticky and that repeat rates are constant, with no significant signs of decay.”
d. Conversion rate: Industry conversion rates are in the teens for web-based reservations (from unique visitors to bookings). Exact figures for mobile based reservations have not been revealed.
e. Churn rate: Relatively low. The churn mainly comes from the closures of participating restaurants. Every year in Singapore, for example, 20%-25% of restaurants cease operation.
f. Customer acquisition costs: Chope is willing to pay up to three years of customer lifetime value (revenue that client will bring over three years).
Key challenge: The key challenge is to overcome the many obstacles that arise with an overseas expansion. In general, many players end up as marginal players in other countries.
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