Restaurants Embrace the Digital Age

Lynn Su　/　photos Lin Min-hsuan　/　tr. by Scott Williams

December 2020

中文日本語

The pandemic is prompting Chef Lam Ming Kin to think about changes to how he’ll run his restaurants in the future.

The Covid-19 pandemic sweeping the globe has changed our lives and made 2020 into quite a year. The disease has made close contact a thing to be avoided, and affected us all, wherever we may be and whatever work we may do. The only comparable event in modern history has been the 1918 flu pandemic.

The pandemic arose like a tsunami and first crashed over the experience economy. Its impact has battered the tourism, lodging, transportation, and food-and-beverage sectors.

People have gotten used to having their meals delivered during the pandemic, leading to what will likely be permanent changes in consumer behavior. (courtesy of Chen Mei-ling)

Less spending on experiences

News of a disease outbreak began to appear in late 2019, but since Taiwan was not at the epicenter, we didn’t feel threatened until after the Chinese New Year. The worst months of 2020 came in March and April, as the number of Covid-19 cases in Taiwan gradually increased.

When online news outlet The Diner News and restaurant software maker iCHEF conducted a survey of restaurants, they found that the industry reached a bottom in early April around Tomb Sweeping Day, with revenues dropping 23% on the government’s social distancing policy. The situation didn’t improve until the outbreak in Taiwan came under control and weekend demand for dining out with friends rose in June.

Chef Lam Ming Kin, a Hong Kong native, operates three different Michelin-recognized restaurants in Taipei: Chou Chou, Longtail and Wildwood. Popular with international travelers visiting the city, all three have felt some impact from the pandemic. “From the best of last year to the worst of this year, sales were down by half,” says Lam.

iCHEF, which provides point of sale (POS) systems to restaurants, has been growing in spite of the Covid-induced economic slowdown.

Diversifying operations

March and April were the restaurants’ most challenging months. “The biggest problem was that we didn’t know when it would end,” recalls Lam. But they didn’t despair. “The whole team stayed pretty positive.”

The epidemic has caused restaurant owners to rethink how they run their businesses. They used to rely on sit-down trade in their restaurants for all of their operating revenue, but lately they’ve been feeling that the risks of putting all of their eggs in one basket are too high.

Many have begun their move towards diversifying their operations with lunchboxes. While people certainly have to eat to survive, they don’t have to eat in restaurants. News of high-end restaurants offering lunchboxes to customers started circulating around mid-year. Perhaps the fanciest of these boxed meals is the Jumbo Gift Box prepared by Mountain and Sea House Restaurant. The restaurant went so far as to have fashion designer Apu Jan design the traditional multi-course feast’s takeaway bag, bringing a new look to a high-end boxed meal market previously dominated by Japanese-style offerings.

iCHEF founder Benjamin Wu believes that the key to restaurants moving into the digital age is simple: “They just need to want to make that change.”

Virtual integration

Software is one of the few industries to have grown during the pandemic. In September, a startup called iCHEF announced that it had raised NT$150 million in capital, and was planning to expand its development team and move forward with its goal of listing on the stock market.

Already seeking to expand, iCHEF has recently picked up the pace of its efforts. The floor of the company’s office on Taipei’s Ren’ai Road is littered with boxes filled with equipment ready to be delivered to new clients. iCHEF’s sales have soared during the pandemic—it currently has customers in Taiwan, Hong Kong, Singapore and Malaysia, and expects to have more than 9000 clients in total by year’s end.

iCHEF cofounder Benjamin Wu has worked with independent restaurants for years. He notes that even though those using digital tools before the pandemic have felt its impact, the rapid development of online ordering has helped them offset some of their lost business. Restaurants which are only now, in the midst of the pandemic, beginning to prepare for the digital age have not fared as well. “They’re paying the highest fees [to delivery services], are the most unfamiliar with processes, are the least adaptable, and have the lowest ratings on delivery platforms.”

Wu says, “For the last century, there was only the real economy, which meant that epidemics affected everybody the same way. But now the advent of digital services enables the business owners that use them to keep their businesses afloat and grow.”