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Growth 18 Jan 2016

How is Online food biz 2016 growing

Food start-ups are preferable because of delivery convenience. Nowadays, ordering food to delivering the same food has became easy with an app, website and smart phones.

Online food industry is in great demand, which leads to increase in expansion and market share. According to report by Indian Brand Equity Foundation’s website, the organised food business in India is worth US$ 48 billion, of which food delivery is valued at US$ 15 billion. With online food delivery players like Zomato, TinyOwl and Swiggy building scale through partnerships, the organised food business has a huge potential and a promising future.

Food start-ups are preferable because of delivery convenience. Nowadays, ordering food to delivering the same food has became easy with an app, website and smart phones. On the same note, Chef Puneet Jain, Bueno said, “This is the best thing that can happen to the people of India. When people can’t work or their kitchen is small, this is the possible way out for them. Like, different people want to try different things to eat and this even saves time”.

Revenue model

In terms of revenue and investments, online food delivery services such as Swiggy has raised $18.5 million in two rounds during 2015. Holachef secured Rs 20 crore in Series A round of funding led by venture capital firm Ratan Tata, foodpanda’s also raise USD 310 million funding.

Presently, Zomato is in 22 countries and it’s no longer confined to restaurant search, having started delivering food also. It has raised $50 million (Rs 311 crore) from existing investors in a round of funding led by Info Edge.

“Right now, everybody is looking at this platform as it is growing well. Everybody thinks that they can make money out of this. But it is not that easy because if you don’t have a good background, good hospitality people won’t understand the quality. Many delivery restaurants are also shutting down because they can’t maintain the quality and the cost at the same time”, pointed Chef Vipul Arora, Bueno. 

New trends

Today, people like millennials are going more towards fresh food, organic food, fresh ingredients and freshly prepared items. They want nutritious, home cooked and affordable food.

Another trend is food on railways, Piyush Kasliwal, MD, Mera Food Choice states, “Zomato, foodpanda are leading in this with huge opportunity. In three to four years we can see online food business will grow mature- it will be different for travel food services and home delivery food services. Apart from only covering the metro cities, grade B & C will also be covered. We have that potential”.

Technology, greater awareness and high income contribute in the growth of online food business. “Companies like us, which are in this unit economics from the beginning is growing and that too in a right direction. We can see good growth in this business”, shared Prateek Soni, Co-founder of Foodport.

As Indian digital commerce is growing, online food will also grow at the same pace. This shows it has a great prospect in food industry.   

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