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Virtual restaurants: redefining dining

Virtual restaurants are often known as ghost restaurants meaning they don’t really exist—well not in the traditional brick-and-mortar sense.

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Published by Questex Asia
on 14 Jan 2019

Virtual restaurants: redefining dining

It’s lunch time in Hong Kong’s CBD district and crowds are out in full force. Picture working all day and finally stopping for a food break, only to realise that there is an incredibly long queue. Or perhaps your colleague is a vegan and is looking for something to satisfy her hunger, but alas her favourite restaurant just shut down due to high rent.

What can you both do? Up until very recently, the only choice was to go hungry. But all of that is about to change with the launch of virtual restaurants – giving consumers access to hundreds of eating choices at the click of a button.  

Virtual restaurants are often known as ghost restaurants meaning they don’t really exist—well not in the traditional brick-and-mortar sense. Instead, virtual restaurants offer a delivery-only dining experience; capitalising on powerful new technology to connect consumers to kitchens and orchestrate the most efficient ordering, payment and delivery processes.

Hong Kong is notorious for its exceedingly high rental costs. For those looking to start a new business there are no exceptions as the challenges are vast—a full-service restaurant costs anywhere between $200,000 USD and $2.5 million USD to begin initial operations.

Meanwhile restaurateurs have to carry the heavy burden of hoping their business is profitable, as statistics show that 60 percent of new restaurants do not make it past their first year of business and another 80 percent close within five years. This is a constant struggle in Hong Kong, and even the most famous restaurant brands are not immune. In 2018 alone, Hong Kong sadly said goodbye to beloved establishments like Wing Wah with its bamboo noodles in Wan Chai and American Restaurant – a Hong Kong fixture for nearly seven decades.

Virtual restaurants give culinary businesses a new way to overcome this challenge. By providing a delivery-only experience, they eliminate the expenses and overheads associated with traditional restaurants. As a result, restaurant brands can more cost-efficiently serve the food at the core of their business, and customers have a quick and convenient way to dine.

Even tougher than operating costs are the rapidly changing consumer expectations. Everyone wants to enjoy a good meal—and fast. Millennials are addicted to convenience and approximately three times more likely than their parents to order food for home consumption, according to a recent UBS report. Traditional restaurants that can’t get food to millennials at their convenience stand to miss out on this valuable (and hungry) consumer segment—while virtual restaurants directly appeal to millennials by providing plentiful options and a customized experience built around technology.

Besides simply offering convenience to consumers, virtual restaurants also provide exciting the opportunity to fill niche gaps in the market. While a full-time restaurant serving gluten-free goods might not have the stamina to survive, a virtual one just might. From delivery meals adhering to strict dietary needs, to exclusive collaborations between small-scale restaurant brands, to limited-time only virtual pop-ups—the business model possibilities for virtual restaurants are vast. With the right technology and logistics, practically any dining concept can be brought to life. Deliveroo uses its unique data to identify gaps in the local market and to then help establish delivery-only sites with cuisines to meet consumer tastes.

The trend of virtual restaurants represents an exciting new world of opportunity for consumers and businesses alike. For businesses, it means a more cost-effective and innovative way to satisfy consumers’ grumbling stomachs and erase the previous complexities of the ordering process—making it utterly seamless. For consumers, virtual restaurants are the ultimate way to enjoy a dining experience with practically limitless options catering to every expectation.

Avid followers of the virtual restaurant trend are no doubt hungry to see what’s coming next – and we say watch this space. With multiple developments in the pipeline and a rapidly changing market in terms of both technology and the business of food, it’s only a matter of time until we see even more groundbreaking innovations.


This article was first published on Questex, on 20 December 2018. Information is correct at the time of publication.

Last Modified Date: 14 Jan 2019