Food At Your Doorsteps: Food Delivery Startups

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Food is the driving force for many and we mean for so many.Waiting for food is what every foodie hates.When they are hungry, they need it right away.A number of customers coming to the restaurant gets irritated since they cannot wait till their turn comes for the table.So here comes the food delivery and listing companies delivering your favourite food from your favourite restaurant at your doorstep that too on time.

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Indian food delivery startups are flooded with funds but still they need to work a lot for their survival in this long run.

Firstly let’s have a brief look at the business models of some of the big giants in this industry.

Swiggy

Started in August 2014.Founders are Rahul Jaimini, Sriharsha Majety and Nandan Reddy.

Since now it has got a total funding of 155 million $.The company is operating in 11 cities till now.  

Its primary source of revenue is Commision based.Its a restaurant aggregator.It list different restaurant,takes online order and delivers food.

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To understand better lets have a look at the scenarioA restaurant in Delhi wants to increase its customer by starting Delivery service like Dominos.He will need a Mobile Application costing 1-2 Lakhs.Then he has to hire 1 or 2 full-time employees and 2 vehicles for food delivery. This will cost him roughly 30K-40K per month.To fund all this cost of expansion becomes very difficult for him.Here comes Swiggy with the solution.

Swiggy provides all the above facilities in its platform ranging from receiving the order through application to delivering the food to the customer.In return Swiggy charges 10%-20% on each order.It is on the whole a Win-Win situation for both the parties as the restaurant business has around 50% margin so ultimately both are earnings profits from this business model.

Second Revenue source for Swiggy is by Advertisements of Restaurants.

In 2016-17 Swiggy spent ₹1.5 for every ₹1 it earned ;revenue jumped 6 fold in last year.

On the whole this business model is suffering loss due to excessive discounts and so much amount spent on marketing.

Zomato :

Food At Your Doorsteps: Food Delivery Startups 3Deependra Goyal and Pankaj Chaddha had started Zomato-The Google of food.

Initially the startup was named as Foodiebay  and it depicted the Menus of the restaurants in a city .So the customer can beforehand get to know the pricing and specialities of a restaurant.It was operating through a website by then.Later they launched an application and presented a feature to book a table before going to the restaurant, hence cutting down the waiting time.

 

Hence Zomato provides a solution to do away the hurdles to the happy-meal experience.

UberEats

It is another biggy in this Food Delivery Business race.

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Besides the normal listing and delivery it is coming up with some new ideas

UberEats has been running virtual kitchens which features new dishes and restaurants available exclusively on the application.

Few virtual restaurants make similar food at a lower price point by changing the ingredients.

Using the data driven approach,Uber tracks what are the food items that are most searched and accordingly decides what should be the next offer in terms of new ingredients, dishes and virtual restaurant itself.

“I think it goes back to us viewing our business as ‘How do we use the data that we have to allow our restaurateurs to utilize the spare kitchen capacity that they already have?”Jason Droege,the head of UberEverything.

The convenience and easy accessibility are the major drivers for the online food delivery market.Besides the consumers are also accustomed to the wide variety of restaurants, offers and reviews on these  food delivery applications.

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Recently Swiggy acquired Mumbai based Scootsy for 50 crore.Scootsy is a platform for the delivery of Food,Gifts and  Clothes.

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Food Panda was bought by Ola in Dec 2017.Rumours are spreading that the two food biggies -Swiggy and Zomato are also planning to get merged.

“Consolidation is a must as the big giants require more growth and the smaller ones are about to exit.” quote by Yugal joshi,Vice President at Texas based Everest group. “Hyper-Local business group(small food delivery companies like Scootsy) may earn better revenue per order but they can’t scale up.They lack economies to scale-up.”

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When we look at funding on these startups-It is really huge.

The amount of fund raised by the food-tech industry(including produce and sell, delivery, restaurant review, and table reservation) reached $480 Million which is over 3 times of the total funding received the previous year ie. 2017

A significant portion of this was given to food delivery startups.

Keeping the investor’s interest in mind it can be said that this industry is all set to explode in the coming years.But experts believe that these companies are not yet set for a long-term success.None of the above companies is making a great profit.This is also due to the excessive discounts they have to offer in order to survive in this competition.

Here’s a very interesting fact!!

The sector is looking out for profit by cutting down the cost of food delivery boys.

Future of the food delivery business may be the Food Delivery Robots.

In UK, Postmates partnered with TopChefs to launch the first food delivery robot.

Food delivery bots are now highly invested for delivery of packages, food, drinks etc.

Starship Technologies in UK  has deployed dozens of delivery bots in partnership with ‘Just Eat’,’Metro Group’, German Package Delivery firm ‘Hermes’ and ‘London food startup’.It focuses on the delivery of Groceries, packages and food to consumers within 3 miles of radius.

Customers will be given a security code to be entered into the robot on its arrival, releasing their meal by just pressing a button.

Domino’s is also trialing “DRU” to send the quick package deliveries in US and European counterparts.

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Domino’s Robotic Unit-DRU pizza delivery robot

“Sooner or Later these technologies will come up in India also.Let’s see what happens as the End Result of these Giant’s competition.But it’s obviously good for us as we are getting so many discounts and offers.”

 

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