SME Spotlight

Tech's the way to sell cheesecakes

Chef Daniel Tay in the kitchen of online cheesecake shop Cat & the Fiddle, where more than 3,000 cakes are made every month.
Chef Daniel Tay in the kitchen of online cheesecake shop Cat & the Fiddle, where more than 3,000 cakes are made every month.ST PHOTO: AZIZ HUSSIN

Singapore's food and beverage scene is a challenging one, with fierce competition and high labour costs. Some companies, however, have managed to thrive, and are spreading their wings abroad to gain market share. Marissa Lee speaks to Mr Daniel Tay, founder and head chef of Cat & the Fiddle, on how his cheesecake business has found success, and what growth plans he has.

Q Why did you decide on an online cheesecake business?

A I am a pastry chef by training, and keeping the business online allows me to keep costs low.

High rents make it very difficult for us to set up a physical shop, and also the reach is only within that proximity. Online, our reach is limitless.

Q How much did it cost you to open Cat & the Fiddle in March last year?

A Close to $100,000. For an online business, the biggest cost goes to marketing, and ensuring a good online shopping experience for our customers.

Our cheesecakes are supplied by Foodgnostic, a separate company I own. It's a food contract manufacturer to a lot of food companies, but Cat & the Fiddle sells just cheesecakes. We are specialised.

Q What does your kitchen process look like?

A I can make 2,000 cheesecakes a day with four or five staff members. They can mix 300kg of cream cheese in three minutes. I created this process. For normal cheesecakes, the mixing process can take a long time because the cheese is very hard. But I created a process where I can mix the cheese in three minutes and get even finer texture and the quality is amazing! I cannot tell you the name of this process.

Q How do your profits look like?

A Most online businesses are not profitable within the first three years because of the amount of marketing investments required. Cat & the Fiddle is well positioned to meet our positive projections next year.

We more than doubled our turnover in one year to about $800,000. We started from 30 cakes a day to over 3,000 cakes a month now.

Q What's the toughest decision you've had to make on your journey so far?

A We brought in new partners last month so Cat & the Fiddle can expand quickly to China, Malaysia, Indonesia and more.

We are lucky to have found partners who are aligned with us. When my partner said I should increase prices, I said no, I still want my basic cheesecake to start at $19.90. We increased some prices, but the $19.90 stays because we want people to have that first feel that buying a cheesecake from Cat & the Fiddle is very, very affordable.

Q Tell us about your expansion plans.

A Next year, we will be heading to Kuala Lumpur, and maybe we will have another satellite in Johor Baru. We're setting up an office in Shanghai as well. We took samples there, they tasted them, they liked them.

The most cosmopolitan city in China is Shanghai, and the most transparent in terms of government agencies is Shanghai. And if in Shanghai you are successful, you can say "close one eye", you will be successful in most cities surrounding the area.

Next year, we'll bring in halal cakes to Singapore so that Muslim customers here can also enjoy my cake. We may open a cafe in Malaysia but not in Singapore. The rental here is too high.

Q You've pumped a lot into improving customer experience. Can you give us some examples?

A First of all, search engine optimisation is important. Just type "cheesecake singapore" into Goo-gle, you'll see we are at the top. We spend thousands of dollars a month just to get there.

We're literally thinking every day about how to minimise processes, how can I make it easier to buy a cake - instead of five clicks, how can I do it in two clicks.

Q You're very high-tech for a cheesecake shop.

A I became very high-tech. I put a lot of thought behind the website. I had to set up an IT company last year just to support this!

If you're an online business and you're thinking of getting someone else to do your website, forget it. Because there are so many changes you need to do all the time. Every month we have changes on the backend, whether they can add this or add that.

We're also creating an app to do deliveries, a courier service. It's still in an early stage.

Q What else are you looking at in terms of IT?

A Food and beverage firms usually waste a lot of time processing orders. Someone takes the order, someone keys it into the system, then accounts must have a copy, it's all bits and pieces. We're developing a seamless end-to-end system for future SMEs so that from end to end we do not have in-between costs.

Q Wow, you sound like an e-commerce company.

A I'm already an e-commerce company. There's more to come, because online is interesting.

That's what makes other companies so successful and why our local companies are not. Because to them, a website is a website. To me, a website is a whole lot of systems involved to make a company successful.

Q Some people say Singapore businesses are behind the curve when it comes to technology.

A Oh, we are. In terms of technology, we are far behind China. I understand one thing: They started from zero. In China, they never had a system. So they want to have a system, they start at the top.

For us, we already have a system, and it's very costly to upgrade, we see all these costs.

They start from zero and go straight to the top.

A version of this article appeared in the print edition of The Straits Times on December 09, 2015, with the headline 'Tech's the way to sell cheesecakes'. Print Edition | Subscribe