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Expansion 2017-04-10

Why subscription based model is biggest disruptor of today's delivery trend

With focus on young clientele and working customers, the subscription-based model is the next big thing happening in India’s food sector.

By Deputy Features Editor
Why subscription based model is biggest disruptor of today's delivery trend

There’s no denying that the subscription-based model is a big hit in the startup world. From serving food, snacks and easy-to-grab meal, these startups are also flourishing success on the juice business. The concept is pretty simple: customers sign up for monthly or weekly deliveries of the food items they want and it is being delivered to them for the days they have sign up with. Realising the potential that the segment is catering to, many entrepreneurs have jumping into the subscription box world.

Already, the trend is a continuous growth story in the international market. According to an article published by NY Times, “Want to Shop for a Surprise? Try a Subscription Box” detailed the new trend and the potential this segment holds. Similarly in India, the rising urban population, along with both female and male working, has pushed this kind of sectoral growth.

Driven By The Need

The subscription model is a vital tool for food startups to enhance their operational efficiency massively. Bringing in the demand predictability and also the delivery planning and inventory scheduling, the model is driven by the need. This model offers a huge benefit of revenue prediction through recurring sales as well. Ultimately, revenue is what irrigates any business and more the guaranteed revenue, better the chances of the startup surviving the white waters of the market volatility.

Additionally, this model brings to the table, the boon of easy calculation of lifetime value of a customer, inventory management, flexibility in scaling and resource allocation. So you see, there is no reason “why not” subscription model. “First Eat offers a seamless experience to its customers with the provision of fortnightly and monthly subscription meal plans available. The user can opt for a generic healthy meal subscription plan or a goal specific plans (weight loss, weight gain, balanced health & NCD’s- pre-diabetic/ diabetic) as per the suitable duration on the First Eat App available on Android & IOS platforms,” shares Shitiz Dogra, Co-Founder at First Eat, which has got over 150-plus running subscriptions, wherein around 30 per cent users avail the facility of all day meals subscriptions and the rest is piece meal subscribers.

Also, the subscription option available on these app enables the user to opt for the desired plan and an instant schedule is prepared at the backend directly accessible by the central operational team that further maps out its delivery scheduling using in-house analytics engine. “We give consumers a choice of selecting hourly delivery slots, 7 days in advance. This helps us in planning our deliveries well. We have our own delivery teams, but we also work with external delivery organizations,” adds Rajesh Sawhney, Co-Founder at InnerChef, which has more than 70 per cent women customer.

A Juicy Biz

As there is a growing need of health and wellness in the country, this trend has also seen entry of many fresh juice players, salad startups to cook up the storm. India’s nascent health food economy is not just disrupting the way people are drinking juices, but also inspiring the health and fresh lifestyle of the person associated with it. What is happening at the bottom of the pyramid is the proliferation of ‘service entrepreneurs’ that are earning as much as probably what you are sitting in office cubicles. Cold pressed juice is a segment that is betting big on India’s growing economy thanks to Norman W Walker’s invention of the process in the US way back in 1930s. “Raw Pressery stemmed out of a personal need of consuming an honestly healthy beverage on-the-go. The idea on gaining momentum, aimed to bridge the need for a juice that balances nutrition and flavour. In summer 2013, we took up the challenge to make the people healthy easier. Addressing the need to create something that mothers would feel happy giving to their kids, we thought that juicing would be the easiest alternative to get kids to consume their fruits and vegetables. Expert teams of nutritionists, medical experts and sensory analysts were brought in to create the recipes for benefits and of course, taste. Voila, Raw Pressery was born,” says Anuj Rakyan of Raw Pressery as cold pressed juice-based out of Mumbai which has scaled itself to around 12 cities, reaching the consumer at 1,500 points of sale by the end of FY16 covering modern trade, institutions, HORECA and direct-to-home channels.

Focusing on young clientele and globally experienced customers, this trend could be the next big thing happening in India’s food scenario. 

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