How the food delivery startups are silently changing the landscape of Indian taste buds

“There is no sincerer love than the love of food.” It is this love that has fuelled the metamorphosis of the restaurant industry into ‘Food on Wheels’. From dining-out to ordering-in, there has been a paradigm shift in the food business.A recent report by RedSeer Consulting, a research and advisory firm, highlights that there has been a 30% increase in the delivery market between 2015 and 2016. Consequently, many start-ups such as Swiggy, Zomato, Foodpanda, and UberEATS have successfully bridged the gap between restaurants and the lazy consumers. The report also suggests that these major online food delivery players handled on an average 160,000 orders daily in 2016.

According to a Bloomberg report, more than 400 food delivery apps were operational in India between 2013 and 2016, raising approx. $120 Billion in funds.

Following are the perceptible effects of the food delivery start-ups in India.

Competitive vendor landscape:

The global online on demand delivery market is highly competitive. It has the presence of a few major players and many small and mid-size vendors. The major players include Swiggy, Zomato, UberEATS, Foodpanda etc. These major players are very competitive in terms of their service offerings. These four major vendors contributed almost about 10% to 12% of the global revenue in 2016. Convenience and easy accessibility are some of the major factors driving the global online on demand delivery market. The demand for online on-demand food delivery services is increasing because of the preference for convenience and easy accessibility to food delivery.

Error-free customization of orders:

In an online process, the customer selects the items from the menu and mentions any other details and places the order accordingly. Without any hassle, the order gets placed on the system and can be processed by the restaurant very quickly. On top of being simple and efficient, it also establishes a good takeout experience.

Since ordering of food is automated through the online ordering system, the customers don’t have to worry about miscommunication.

Integrated Point of Sale system:

The Point of Sale (POS) is the time and place where a retail transaction is completed. At the Point of Sale, the merchant calculates the amount owed by the customer, indicates that amount, may prepare an invoice for the customer and indicates the options for the customer to make payment. Because very few systems are uniform across all chain restaurant locations, many franchises struggle with implementing new promotions into their POS systems. Online ordering can help alleviate this issue, as many online ordering systems are situated above the POS, they can easily integrate themselves into multiple POS providers at once. For franchised restaurant locations, and other widespread businesses, this is an amazing feature.

Positive Customer Service:

Customers can order very quickly or can take a very long time to decide. No longer an issue for restaurants. Switching the focus from offline ordering to online ordering means less hassle on handling undecided calling clients and the staff time lost in the process.

It is much easier and considerably cheaper (or even free) to create and maintain a great looking menu that will impel the customers to order from the restaurant every time they see it

Better Marketing ROI:

Online delivery is a ‘sticky market’, once customers sign up, 80% never leave the site, creating a strong winner-take-all dynamic, in which the reward goes to the player who can sign up the most customers in the shortest amount of time. Online ordering system helps the service provider to retain customers with them with integrated loyalty programs like sending personalised SMS, emails, reward points etc. Analysing customer data also facilitates provision of more targeted services. It helps to grow their business and to drive revenue.

Revenues:

Online food orders account for 4% of food sold through restaurants and fast-food chains, while the expected annual growth rate is 3.5%. The process is fully automated, with minimal manpower and thus leads to better returns in terms of sales. Finally, being a 24*7 operating business, online food delivery system allows the owner to earn, even when he is not functioning.

As India moves towards digitalization, the tug of war between conventional and new-age services has become more apparent. Whether or not both coexist is yet to be determined.What do you think about this monumental shift being brought about by these food delivery start-ups?

We are open to your views and comments.