Chefmarket is a delivery service providing the ingredients for restaurant-standard recipes. The company delivers food to customers as well as providing step by step picture recipes for preparing home made dishes. The project began in 2012 and is based in Moscow. It has been rated AA by the organisation Russian Startup Rating.
Sergey Ashin: CEO and founder
Vasily Emelianenko: Brand Chef
The whole team is made up of 20 people, 10 handling the business and 10 chefs
Sergey, hello! Tell us your story.
The idea came to me in 2012, when I was still working for McKinsey and lived between Germany and Moscow. It was very straightforward. Whist in Germany, a similar business appeared, and it seemed like a good idea to us, so we decided to use it. We thought that an analogous business could be successful in Russia. But we ended up doing it in a different way. In the west it was an offline business and it worked like this: you go into a shop, pick a dish, and then take all the ingredients for it, which are right there on the table. We thought that wouldn’t work here. In the first place, high street retail isn’t growing and premises are expensive and few and far between, plus the transport situation in cities means that people would have to be really motivated to go all the way to a shop in another part of town.
How did you adapt the business to Russia?
We decided to opt for an online business, investing in the product, developing the site, the kitchen and logistics, rather than the costs of building shops. This way we could offer people a wider range of dishes, not just the 15-20 available from the German business. We now have a range of 300 dishes. Our business works a lot like a restaurant. We even prepare dishes, we just don’t go further than collecting the ingredients, which we deliver to customers. We don’t have tables, seating, waiters or a live kitchen, so our prices are a lot lower than in restaurants.
Is it still possible to order prepared dishes?
Yes, customers can order ready meals, but it’s a fairly small part of the business and the range is pretty limited. Soon we’re going to close that side and focus fully on the core business.
What kind of cuisine do people prefer, from what you’ve seen?
European. Russians have already been hooked on it for a long time. Mainly the classic stuff, Italian and French dishes. There are also some really big sellers from other regions, including Russia. I think the reason for this is that when people are trying out a new service, they pick something they know from the menu so that they can properly judge its quality. There are also some other quite funny reasons behind people’s orders. For instance, there is one woman who keeps ordering borsch from us: 8 portions one day, then 3 days later another 8. We were wondering why this might be, until she explained to us that her boyfriend loves borsch but she doesn’t know how to make it. So she tried ordering from us and he loved it. Now, as she says, ‘there’s no going back’. By the end of the year we plan to be making 6-7,000 deliveries a month.
And who are the people using your service? What is your average customer like?
Principally it is women and married couples, because generally it’ss people preparing dishes for someone else. The proportion of men using the service is about 20%. It is also useful for people who live alone, as they can order a 2 person portion of a dish (that is the minimum) and eat for less than in a restaurant, putting the rest in the fridge where the ingredients won’t go off.
Do you only deliver in Moscow?
We deliver orders in Moscow and the Moscow region within 3-4 hours of their confirmation. No other delivery service in Moscow can beat that speed. We deliver to St Petersburg once per week, and soon that will go up to twice per week. There is also an option to order in advance, which gives customers a 10% discount. The speed at which sales in St Petersburg are growing is very heartening for us. Because of that we started planning to expand the business, and now it’s going ahead! I think by October we’ll even be delivering to Nizhni Novgorod and Kazan!
Have you thought about physical expansion, ie opening additional kitchens?
We looked at different ways of expanding: opening new kitchens, franchising etc. But in the end we chose the current option, which guarantees the delivery of quality, fresh products, stored under the correct conditions. You have to understand that the organisation of a business like ours is a very complicated process, where the operational component is very important. The ordering in of products, their handling and delivery is a long logistical chain, which requires quality control at each stage. Doing this remotely would be an even more challenging proposition. This is why we’ve taken the simpler route for the moment in terms of developing our business. In terms of more distant horizons, we’re still not thinking about that this year.
What about the global market?
We are already taking concrete steps in that department, but at the moment the world is coming to us. In a few days we’re going to launch a diet range together with famous French chef Pierre Dukan, whose diet is one of the most popular in the world at the moment. We came up with the idea to collaborate on a project after we were first introduced not long ago. We will help people to lose weight, and to do it on a budget. In fact, there has already been a great response to the idea. We got around 1000 orders on the test run, and this was only through our social network page, without any extra advertising.
Are you already making a profit?
We are getting towards breaking even. We’re still not making profit but we’re not losing money anymore. With the funding we’ve received we are doing great, and are able to work on some cool new projects which will eventually pay for themselves.
Why did you apply for a Russian Startup Rating?
Our company is approaching the active growth stage, when we will need additional funds to accelerate our growth. We will be inviting major investors, specialising in the financing of projects in the later stages of development. Since this is a fairly slow process, we need to start ahead of time. That’s why we decided to try the RSR platform, as one of the instruments for reaching the biggest investment funds.
Do you use Shefmarket yourself?
Of course. When we were just starting up and there weren’t many customers, the reason we were so sure that it would be a hit was because the whole team was using it and we knew it was great. And we’re still devout users to this day.
What advice would you give to someone starting up a new business in Russia?
Focus on creating a product which you yourself will use. And likewise, don’t start a business of which you yourself are not an avid customer. If you are a customer yourself, then you will understand whether it’s worthwhile carrying on with it during the toughest moments, and there’ll be lots of them. Good luck!
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