Upasana Ganguly, 23, an associate at Price Waterhouse Coopers, living in Mumbai often falls back on food delivery apps. She told BE, “After a tiring day at office, I do not want the hassle of cooking. Food delivery is the most viable option. Also the restaurant finder apps, with all the offers that they provide, have made eating out convenient.”
Food and beverage apps are among the most popular apps. Nowadays, restaurants are pegging their business models to cash in on the popularity of the likes of Zomato, Swiggy, Uber Eats, Dineout, and others.
The online food delivery market in India amounts to almost `51,000 crore. Bengaluru-based Swiggy, which is India’s fastest start-up to become a unicorn (start-ups with valuation exceeding $1 billion), delivered about 33 million orders in March, 2019. Its main rival, Gurugram-based Zomato delivered around 38 million orders in the same month. Both companies are now focusing on geographic expansion. Zomato claims it has a larger footprint, with presence in 170 cities and about a lakh restaurants live on the platform. Swiggy has tie-ups with around 75,000 restaurants across the country and about 1.7 lakh delivery partners.
These food and beverage apps have various business models. Swiggy and Uber Eats are based on an on-demand food delivery business operation. Working as a bridge between restaurants and customers, these apps utilise an innovative technological platform that works as a single point of contact. Zomato, on the other hand has a number of business models. A source from Zomato’s Kolkata office told BE, “We have Zomato Gold which gives its members attractive discounts in restaurants. We also have the online food delivery model. Additionally, we will also be introducing a business that will deliver organic materials to our restaurant partners.” He added, “Our business has grown tremendously over the last 10 to 12 months and there has been a significant employment generation. In Kolkata, there are about 10,000 full-time delivery boys.”
Swiggy has big plans to leverage their army of delivery partners. For instance, it's recently launched the ‘Store’ service in Gurugram, which delivers from fruit and vegetable stores, florists, kiranas, supermarkets and pharmacies. Zomato overcame the substantial supply deficiency in the market, especially in small towns, through cloud kitchens. This initiative drives supply by enabling small players to supply food. It has also been enhancing its tie-ups with restaurants. Mohit Kumar, Chief Operating Officer, Food Delivery, Zomato recently told media, “We offer all the services that a restaurant may require at any given stage of the business.”
Dineout, which claims to be India's largest dining out platform, is looking to expand its market, both in India and abroad. Dineout’s business-to-consumer (B2C) arm helps customers discover restaurants, aids in reservations and offers discounts. It also has various programmes such as Dineout Pay, which helps in bill payment at over 12,000 restaurants through an app or a mobile site and also assures cash back. Gourmet Passport, a membership plan under Dineout, offers “Buy One Get One Free” at around 1,000 restaurants across eight cities.
These apps have helped restaurants. Subhrajit Saha, Assistant Regional Manager, Eastern Division, Barbecue Nation, explained, “Zomato ratings justify our service, quality and standard. The existing as well as new customers get to know about the details of the restaurant from feedbacks and reviews in Zomato which further affects the footfall of the restaurant. Dineout, on the other hand, influences table reservations.” He also pointed, “However, in case of price changes, if these apps do not update correspondingly, it creates utter confusion among the guests.”
According to a study by business consultancy firm, Market Research Future, the online food ordering market in India is likely to grow at over 16% annually to touch $17.02 billion by 2023. The study, titled ‘Digital Platforms Reign in the Food Ordering Market’ said, “The rising number of logistics providers has also enabled food delivery companies to optimise their fleet, thereby reducing delivery time. Online food delivery platforms are focused towards acquisitions and are collaborating with logistics companies to manage delivery operations in the dedicated region.”