By courting Asian restaurants, delivery apps under the radar are gaining in the US

NEW YORK – When Kelly Wu feels bad and wants to deliver con, the Chinese oridge she grew up eating selects a platform that many may not have heard of.

New York City residents don’t open apps from billions of dollar businesses Uber eats or Doordash. Instead, the 22-year-old will lift up Fantuan, a Vancouver-based startup that focuses specifically on the ecosystem surrounding Asian cuisine.

“I feel that it’s merely a “Asian” Durdash or Uber Eat,” Wu said in an interview with CNBC.

Digital food ordering and delivery platforms have ingrained in everyday American life over the past decade, with companies like Uber Eats, Doordash and Grubhub becoming popular names. But when it comes to Asian cuisine, enthusiasts like WU and restaurant owners have opted for smaller platforms like Fantuan and competitor Hungrypanda.

According to co-founder Yaofei Feng, Fantuan’s strategy differs from the strategy of a larger food platform, given its focus on Asian companies.

The 11-year-old company is talking directly with the shopkeeper about getting to the platform rather than trying to reach them online. These conversations are often held in Chinese. He says that many of these entrepreneurs speak English as their second language.

“The way we gain their trust is very unique,” Fenn said.

The availability of non-English options in the app is attractive to business owners who can easily communicate in their first language. Also, Feng says that app designs are more reminiscent of Chinese platforms like Alibaba than American alternatives.

Since Fantuan first entered the US in 2019, Feng said it has expanded to more than 50 cities ranging from big cities such as Los Angeles to university towns such as Davis, California.

Rather than running a massive advertising campaign, Fantuan spreads the word primarily by providing a sign holder with a storefront and stickers for delivery drivers. The startup has worked with influencers on platforms such as Tiktok and Rednote, popular short video apps in China.

Feng said Fantuan’s main customer base is first-generation immigrants, and international students long for authentic cuisine tied to their home country. He said the company will meet with the University Student Association to find potential customers coming to the US from Asia.

However, Feng said the app could reach a larger audience as food containing bubble tea becomes mainstream in the US.

“With immigration and social media, everyone loves Asian food,” Fenn said. “If you want the real options, I’ll use the app as well.”

Following the acquisition of Chowbus, many business owners and users consider Hungrypanda to be Fantuan’s main competitor. Wu said she also has an app for Hungrypanda but hasn’t ordered it since she first started using Fantuan.

Hungrypanda did not respond to a CNBC interview survey for the story. Last year, Hungrypanda announced it had raised $55 million.

As for the broader food delivery app landscape, Feng said it is looking at companies that “coexist” with larger-named companies rather than “compete.” That’s because Fantuan’s appeal is not trying to win large chains that already use other platforms, but instead link real and often small businesses to their customers.

“It’s very difficult to compete with monopolies… it’s long term,” he said. “But we want to maintain a unique way.”

In Flushing, a neighborhood in New York City’s Queens Borough, Andrew Chau, known for his large Chinese-American population, has a first-hand look at how his client base has addressed Fantuan.

Chau said his front post base of Yommy’s rice x yogurt is watching around 50 orders on the platform every day. In comparison, Chau said he was lucky to receive one order every few days on apps like Uber Eats and Doordash.

Chau likes that the app can provide user promotions and communicate with customer service via Wechat, China’s popular messaging platform. He also said many restaurants nearby use the platform.

At Flushing, “I can see a lot of Fan Tuan logos,” said Chau, who owns five stores in the New York City area. “I can’t see a lot of Uber food and Doordash.”

Wu also said he regularly sees his logo around areas with a high proportion of Asian companies, such as Flushing and Manhattan’s famous Chinatown area. She has also seen delivery drivers come out wearing both Fantuan and Hungrypanda items.

For WU, Fantuan’s restaurants’ reliability is better than other more prominent food delivery platforms. She also considers Fantuan’s reviews to be more reliable.

“You can find dishes that you won’t find on the American food ordering app,” Wu said. “If you’re looking for traditional Chinese food, rather than using uber food or dodash to get something like orange chicken, I think it’s definitely a way to go.”