[Interview] Yifeng Yu (Yu.eat): “We aim to become European market leader in Asian virtual restaurants”

Belgian startup Yu.eat, which helps restaurants gain additional revenue with virtual brands on delivery platforms, is already working with 350 partners in three countries one year after its launch. The company aims to become the European market leader in Asian virtual restaurants.

Helping existing restaurants

Just one year ago, Yu.Eat was founded by brothers Yifeng and Yishen Yu. The company is already active in Belgium, the Netherlands and Germany. Yu.eat’s approach is different because of its asset-light model, which uses existing infrastructure to scale up quickly, Yifeng Yu told RetailDetail.

“What we do is help existing restaurants generate additional sales through delivery platforms by integrating our Asian virtual brands. We help them with marketing support, with easy-to-prepare recipes, with exclusive ingredients, with training and with the integration on delivery platforms.”

Forging partnerships

“After my studies, I opened four small Chinese takeaway restaurants. When the pandemic broke out, we converted them into dark kitchens with different concepts on delivery platforms. But scaling up physical locations is difficult, time-consuming and capital-intensive. So we came up with another, more easily scalable option. There are already so many restaurants, often struggling. Why open additional competition, when we can also establish partnerships?”

You may call it a win-win situation: Yu.eat does not need to invest in kitchens and employees, while the restaurants earn some additional revenue. “In doing so, we make it as easy as possible for them. They already have their own business, so they don’t want to add too much complexity in the kitchen.” There is no shortage of success stories: “One of our first partners had put his business up for sale, but we helped him through the pandemic and today he is still selling our two brands.”

Licensing model

Those two brands are Chifuri for traditional Chinese cuisine, and Incheon for Korean fried chicken recipes. Why exactly these two? “Chinese cuisine is very popular in Europe. Korean is more trendy, and it is booming. We have a strong R&D team to discover the next trend wave and help our partners surf on it. If we identify new trends somewhere in the world, we can be the first in Europe to launch such a new concept.”

Yu.eat is not a franchise concept, but a licensing model, Yu stresses. “Partners can use our brands, our recipes and our exclusive ingredients – these are important because they are the backbone of the concept. We strictly monitor the quality that partners serve under our brands.”

Step by step

The startup has European ambitions, but does not want to hurry: “We want to become the market leader of Asian digital restaurants in Europe. We are getting there step by step. For further expansion, we have several countries in mind, obviously mainly the bigger markets around us. But first we want to consolidate in the three markets where we already operate. After all, we have only been in business for a year.”

Growth comes not only from additional partner restaurants, but also from new brands: “Today we limit ourselves to Chinese and Korean, but the potential to scale up further is huge: in China alone you have so many different cuisines. We are developing additional Asian brands and recipes, but we are still keeping them secret.”

Retention is crucial

After the pandemic, how has the virtual kitchens sector fared in a difficult economic context? “After the explosion of virtual kitchens during Covid, many cities now have a lot of providers. That is good for consumers, but you have to strictly monitor the quality: if it is disappointing, the customer will not return”, Yu knows.

“We are approaching a point where only restaurants that deliver good quality will survive on delivery platforms. The most important thing in a business like ours is retention. We are analysing the data that the delivery platforms can give us.” Belgian dark kitchen pioneer Casper was recently forced to cease its activities, something that Yu regrets: “Casper had a more traditional concept with physical locations, which is very capital intensive. We are taking a different approach, with a lighter structure. We see a general shift in the market from physical locations to the concept of virtual brands.”

Growing organically

A first round of investment in June provided the entrepreneurs with two million euros, from Walloon investment fund Wapinvest and some business angels. “At the moment, we are not looking for additional growth capital. We are growing organically. We think there is great potential, but also that growing too fast to any cost is not our model.”

This story started 27 years ago, Yu stresses: “That is when our parents, who arrived in Belgium thirty years ago, opened a Chinese restaurant in Enghien – a business they still have today. I grew up there with my brother, we helped there from an early age. That today we are able to scale up those recipes and spread them internationally, and that we can help existing restaurants to generate more income, that is something we are very happy about.”