SINGAPORE — A food subscription start-up from the United States offering S$1 hawker fare and restaurant meals from S$6.99 is hoping to shake up Singapore's crowded food-on-demand market.

Unlike the likes of Deliveroo, FoodPanda, Fastbee or Plum, the new player MealPal, which started its service on Monday (July 16), does not deliver. And instead of unlimited choice, its 250 participating food and beverage outlets — such as The Soup Spoon, Teppei Syokudo, Grain and Tuk Tuk Cha — offer only one dish daily.

For S$95.88, subscribers can get 12 lunch meals at restaurants, which must be redeemed within 30 consecutive days. For S$2 more, they get two additional hawker meals.

Dinner plans cost S$89.90 for 10 restaurant meals and S$127.35 for 15 restaurant meals. This works out to between S$6.99 and S$8.99 for a restaurant meal, which MealPal says is 40 per cent cheaper than dining-in.

The service is currently available only at four business hubs across Singapore — Buona Vista, the Central Business District (CBD), Novena and Orchard — and only on weekdays, excluding public holidays.

Similar to other food-on-demand start-ups like Fastbee and Plum, MealPal customers must order their meals hours in advance through the app or website. After redeeming all the meals in the plan, or at the end of the 30-day cycle, users will be automatically charged for the next round, with the option to pause between cycles.

Singapore is the 17th market the two-year-old start-up is entering into. Having raised US$35 million (S$47.81 million) from venture capital firms such as Menlo Ventures, Bessemer Venture Partners and Comcast Ventures, MealPal is looking to expand its reach into Asia, beyond its existing presence in the US, Australia and the United Kingdom.

In Singapore, its general manager of international markets Paul Clifford said there are plans to add more dining partners, as well as to expand into other business areas such as Jurong East and Changi Business Park.

THE MORE THE MERRIER

Mr Clifford said MealPal's operation model is to allow participating restaurants to harness economies of scale by mass producing a dish cheaper and faster.

And because the Miami-based start-up does not deliver, it saves on costs. "We don't make food and we don't move food. (There are) huge costs in logistics and delivering food," said Mr Clifford. "This makes our business model more sustainable and scalable."

Mr Reece Wee, Country Manager and Mr Paul Clifford, General Manager of International Markets from MealPal. Photo: Najeer Yusof/TODAY

Asked about the threat the new entrant poses, Fastbee, Deliveroo, GrabFood, Plum and Foodpanda said they are not "direct" competitors.

Unlike Fastbee which targets "business parks and buildings with limited food choices for now", its founder Khoo Kar Kiat noted that MealPal targets consumers who are based in areas with a wide selection of food options.

Others like Plum, which offers curated menus at specific collection points in Singapore, Hong Kong and Australia, welcomed the newcomer.

"Competition is good as this would keep our team on their feet and look for unique ways to improve our service," said Plum's country manager for Singapore Edgar Sung.

Noting that the MealPal has certain "pain points" for consumers — such as the subscription model which robs customers of sovereignty and the inconvenience of having customers pick up their food at their respective restaurants — Dr Ang Swee Hoon, associate professor of marketing at National University of Singapore's Business School, said it could have its work cut out trying to win over a sizeable market share.

Consumers like Mr Sean Yap, who works in the CBD, said he might try out the service, but may not subscribe to it for the long-term.

"I can see the convenience, but it gives only 12 meals, which means I still need to buy lunch as normal on other days," said the 27-year-old. "Also, it doesn't deliver, so if I want to take away (my meal), there's not much added convenience. And if I want to eat at the hawker centre or restaurant, I'd still have to fight with the crowd anyway."

NO INTENTION TO ENGAGE IN PRICE WARS

Consumers hoping that increased competition between these start-ups, most of which are funded by venture capital funds, would lead to more discounts could be disappointed.

Unlike the ride-hailing sector, most food-on-demand companies told TODAY that they have no intention to "burn money" by dangling huge discounts to lure customers and wipe out their competitors.

Instead, some start-ups like Plum do not charge a delivery fee or require a minimum order, while others like MealPal tout lower price points as part of their strategy.

MealPal's Mr Clifford said: "When we price a market, we want the price to be jaw-dropping. If we start changing that (starting price), we lose that jaw-dropping notion and I don't think that would be the right thing."

Having seen numerous players come and go, Foodpanda, Fastbee and Deliveroo said "burn-based strategies" to gain market share are not sustainable in the long-run given Singapore's limited market size.

As Dr Ang put it: "To offer such discounts and for a sustained period to wipe out competition, the startup must have deep pockets to bear the loss until it is the last Mohican left standing."