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growth 2014-06-07

Online food delivery sees a boom

Online food ordering in India is growing at 40 percent annually.

By Deputy Features Editor
Online food delivery sees a boom

These days’ people are prone to placing food orders online and capitalising this trend a lot of restaurants are yielding good returns by registering themselves on online ordering sites like Foodpanda, Tastykhana, JustEat, HyderabadSpecial etc and many local ordering websites are also following suit.

Driving factors

Greater awareness and disposable income along with deeper Internet penetration, availability of more payment options, long working hours and erratic lifestyle are contributing online food ordering business. At the same time, with more and more people wanting healthy food, or food similar to home cooked meals that too easy on the pockets is leading to the rise of online food business in the country.

Nixon Dsouza, Brand Manager, Nom Nom, says, “Penetrating through every commercial aspect humans have started using technology for everything and food ordering is one such developments”.

Rohit Chadda, MD and Founder Foodpanda, believes, “Online ordering is convenient giving the customers a broader option to choose from the restaurants listed on the website.”

Future of the business

As per the industry experts, the overall food delivery business is more than USD 7 billion to which online food ordering contributes 5-7 percent and is growing 40 percent per year than dine-in culture. The margin is however two to three percent higher in deliveries. According to Ritesh Dwivedy, MD and CEO, JustEat, “The future seems bright for the online food business in India, as we are trying to catch up with developed markets where 30 percent of delivery takes place through online channels.”

Major players

Online food ordering is at an exciting phase now. Many local and national players are joining the space. In fact the foreign brand JustEat has also tied up with the Bangalore based HungryZone. Foodpanda which started its business from Delhi-NCR is the major player in the segment followed by JustEat and TastyKhana, a Pune initiative. Besides, DeliveryChef, BigBite, Titbit and eatallnite are the emerging players in the online food delivery market which is estimated to grow at 40 percent annually.

Benefits
Placing food orders online benefits consumers, restaurants and the food delivery players. For consumers, it is not only an easy and convenient tool but it is also a great platform to avail good discounts.

Vasul Chauhan, Restaurant Manager, Smokeys Barbeque & Grill, said, “We have partnered with JustEat to explore new business ‎opportunities and give a push to our already successful home delivery format but till now the response is not overwhelming.”

However, Dwivedy is of the opinion that, “The profit margin is 2-3 percent higher in deliveries as compared to dine-in these days”

Marketing strategies

Online food delivery platforms largely try to be present in all the channels that drive awareness. For example, newspapers, television, hoardings and billboards to the social networking sites like Facebook and Twitter, they advertise in all. Chadda explained, “We give about 15-30 percent discounts on ordering through us. At the same time we have also organised several campaigns including the food gifting programmes and buy one get one free deals.”

However JustEat creates a quarterly content calendar taking into account the major events and festivals in the form of an image post, status, article or info graphics.

 

Major players in the segment

Weekly traffic

(%age)preferring Cash on Delivery

(%age) preferring online payment

Foodpanda

4-4.25 lakhs/week

70%

30%

JustEat

3.75-4 lakhs/week

90%

10%

TastyKhana

2-2.5 Lakhs/week

90%

10%

 

Source: Food ordering company officials

Though the online food delivery is an interesting urban phenomenon, but India is yet to witness how the business model proves itself capturing the Tier-II and Tier-III cities in days to come.

 

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