An interview with Rohit Chadda, MD and Co-founder, Foodpanda.in.
Online food business is on the verge of experiencing an exponential growth with number of online food delivery services in the country. Talking to Restaurant India, Rohit Chadda shares his experience on what has brought this growth along with the brand’s investment and expansion plans.
We see a good number of online food, table reservation and restaurant review website have been launched in last two years. What has brought this trend in Indian F&B industry?
With the increased Internet penetration, consumers now have access to more information and they're willing to explore especially when it comes to food. Food delivery segment is growing at 40 percent which is much faster than the 25 percent growth rate of overall organised food retail in India. Increased urbanisation, growing population of working women and hence working couples and changing consumer preference due to higher disposable income and long working hours are the driving force to bring this growth.
Tell us about the business model Foodpanda follows. What got you started in this venture?
We're a marketplace for food ordering. We charge a commission from the restaurants for the successful orders we bring in. Our service is completely free to the end customers. India as a market has tremendous potential. The total food delivery market was at Rs 1,000 crore when we started in 2012 and is pegged to grow to Rs 5000-6000 crore by 2017. And this was a huge opportunity to bring in all big & small restaurants to a single platform. That's how we got started.
What is the tie-up and revenue sharing arrangement you have with restaurants listed on your website?
Currently we have more than 3000 restaurants across 15 cities in India. We charge a commission from the restaurant and our service is completely free for the end customers.
How do you ensure quality and delivery?
The major challenge we face is quality control and delivery times, both of which we monitor very closely for each of our partner restaurant. We have introduced technology in order to make sure our order processing times are below two minutes. Additionally we impose strict Key Performance Indicator (KPI) on our partners to ensure they deliver the kind of service our customers expect from us. Non-compliance makes sure they are de-listed from our platforms.
Which are the cities you are present in? How many restaurants have you partnered with? Is there a discount if it is ordered from your website?
We're currently present in Delhi, Gurgaon, Noida, Ghaziabad, Faridabad, Chandigarh, Ahemadabad, Vadodara, Jaipur, Pune, Mumbai, Kolkata, Hyderabad, Bangalore and Chennai with 3000 plus restaurants on board. We've around 500 plus restaurant deals live on the website. Going by the responses we have been receiving we want to be the Google of online food ordering.
What is the payment model? Does the money get credited to the restaurants or do you pay them later?
For customers, both payment options cash on delivery and online payment are available. We have a credit cycle with the restaurants and transfer the online payments to the restaurants on a regular basis.
What is the investment so far in this venture? Who funded the same?
In 2013 Foodpanda secured more than USD 20 million funding from Phenomen Ventures, AB Kinnevik and others and another USD 8 million from iMENA Holdings. In Feb 2014, Foodpanda secured another USD 20 million from a group of investors including Phenomen Ventures.
So where can we see those investments are going?
The additional funding will be used in expanding to more cities in India as well as increasing our global presence and will be used to streamline operations to further improve our customer experience.
You recently partnered with Southeast Asian restaurant review portal OpenRice. What benefit can a customer expect from this partnership?
Although, we already have a list of reviews on our portal, partnering up with OpenRice ensures further addition of credible reviews to the customers which means our customers can make a more informed choice while ordering with us thus increasing convenience and improving customer experience further.
What is your expansion plans in India and abroad?
We're already present in 40 countries across four continents and want to expand to 50 countries by end of the second quarter this year. In India we plan to reach top 20 cities in the same time period.