Increasing disposable incomes clubbed with work and hectic schedules have seen a surge in takeaway and delivery formats.
The home delivery segment of the organised food services market in India is still evolving and is estimated to grow at 30-40% over the next five years. Several food services players have entered the home delivery segment, which contributes to 15% to the chains revenue. Some of the brands have derived significant benefits by deploying a focused approach towards home delivery, generating 30-40% of revenues from delivery services.
The underlying interest of players in this business is quite clear. There is requirement of a smaller space which translates into lower and cheaper rentals and, consequently, lesser capital investment (rental deposit, interiors, furniture, etc.). In addition to that even the ongoing operational costs (staffing, utilities, etc.) are lower.
Services Offered in Takeaway and Delivery
Mobile communication: Using mobile consumers now have more convenient means for ordering food from home. Domino’s Pizza recently launched a mobile ordering application using which consumers can order from anywhere, at any time, even via their mobile phones. Pizza Hut with a new sub-brand, called Pizza Hut Delivery (PHD Express), started four years ago to capture the upward spiraling demand in the office and home-delivery segments. International QSR giant Mc Donald’s launched its home delivery services called McDelivery in 2004. Other prominent brands, such as KFC and Subway, also provide home delivery services.
Home delivery: The reason for the growth of this segment is the corporate growth towards commercial hubs, like Gurgaon, Bangalore, Salt Lake City (Kolkata), Andheri (Mumbai). This has lead to a higher number of expatriate office-goers who stay away from their hometowns and prefer home delivery instead of dine-in and cooking.
Online food services: This is another very recent concept in India and it has also benefited immensely from the migration of employees. These services are unique as they do not have any physical presence and only deliver to offices and homes. Moreover they offer food items at prices far lower than those offered by brands. Some services, like Home Curry, Mad Bites, fall under this segment.
Span of Delivery Services in India
|City||Total Number of outlets offering delivery services (%)|
Thus it can be observed that the commercial viability of delivery formats underpins the growing phenomenon of food service retailers.
(SOURCE: INDIAN FOOD SERVICES REPORT, 2013, NRAI)