Food ordering apps are transforming the way modern India eats. Akanksha Maker investigates
We live in a world that runs on instant gratification. Technology has transformed the way we operate; from shopping for those latest headphones to befriending strangers — there’s not much that can’t be done with a click of a button. About ten years ago, no one in India would have thought of ordering food through a hyperlocal* app. Today, we won’t have it any other way.
Missed breakfast at home? Order in an omelette to your office desk and enjoy it while you read your emails. Have special requests? Type a little note to your delivery person on the app and rest assured you’ll receive your food just the way you want.
Forget the hassle of dealing with cash, most apps allow you to pay via Paytm (an e-wallet) or net banking. If hunger pangs are troubling you, keep a close eye on where your food is in real time through the in-built tracker. It all stems down to one thing — convenience. It is about the practicality of not having to deal with a human on the other end, and the simplicity of scrolling through menus and pressing “add” on an item you fancy.
This seamless format has changed the way we order food, especially in the metros of India. According to an analysis by Acharya Institute of Management and Sciences (AIMS) in Bengaluru, “E-commerce in India is expected to grow from US$2.9 billion in 2013 to a mammoth US$100 billion by 2020, making it the fastest growing e-commerce market in the world. E-commerce is experiencing a spurt in online food and restaurant service companies, which is expected to reach US$2.7 billion by 2019.”
With a population of over 1.3 billion, out of which over 50 per cent is between 25 and 35 years of age, we have one of the largest number of youths in the world. Palates have evolved and the variety of food offered on these apps doesn’t cease to impress them. Whether it’s sushi from the newest restaurant around the corner or good old hot chocolate post lunch in the office, the millennials know what they want and want it quick. This trend isn’t only observed amongst the premium audience; food apps list all kinds of restaurants and cafes, serving all kinds of pockets, from budget to high-end.
Families with multiple sources of income and evolving needs of today’s youth that is exposed to global cuisines (thanks to social media and travel trends) are additional catalysts to the online food ordering services. The element of luxury associated with takeout is undeniable. Its convenience doesn’t just comfort you with tasty food but also resolves the hassle of having to cook at home. Additionally, our fundamentally patriarchal society is experiencing positive changes where working women are defying archaic values that restrict “her” to the kitchen. As per the analysis by AIMS, working women are spending a key amount of their disposable income ordering food.
It took one notable player in the industry to lay the groundwork for food ordering apps in India — FoodPanda, a web and mobile interface that operates pan-India in cities including Pune, Bengaluru, Hyderabad, Chennai and Delhi. Its presence across smaller Indian cities like Chandigarh and Guwahati has helped it become a widespread phenomenon that has created a dramatic new segment in India. Through its app, users choose items from one or more restaurants. FoodPanda passes them on to its partner eateries and despatches delivery boys (its own and from vendors) to the end consumer. Germany-based FoodPanda treaded into our country in 2012, when local players such as JustEat and Tasty Khana, on similar lines, were trying to carve a niche with their sporadic presence, but hadn’t succeeded.
FoodPanda’s success was followed by the entrance of a few entrepreneurial Indian players that found lucrative markets in India’s big cities. Food enthusiasts took notice when Sriharsha Majety and Nandan Reddy introduced Swiggy to the world. India’s start-up city Bengaluru was the birthplace of Swiggy’s operations back in August 2014. The urban dictionary translates “swiggy” as something unbelievably legit and real; perhaps a positioning the South Indian duo envisioned for their technological masterpiece. Within less than a year of its inception, Swiggy secured US$2 million funding from Accel Partners and SAIF Partners.
“We understood that ordering platforms for restaurants were broken. Ordering food has always been a big hassle for consumers, hence, we decided to take the plunge and fix it with Swiggy,” says Majety. Swiggy’s aim was to bring customers closer to their favourite restaurants. Unlike food ordering apps of that time, it launched with its own fleet of delivery personnel who were equipped with smartphones that ran on complex algorithms to simplify the delivery process. Its “no minimum” order policy also helped it stand out in an emerging market. As for revenue, Swiggy earns commission from restaurants on every order placed. “We’ve almost been doubling every month since the launch. After raising our first round of funding, we’ve expanded our coverage and partnerships, and tripled our order numbers over the last few months. Our goal is to revolutionise the food delivery market in India by providing a cheap, fast and efficient alternative to the already short-staffed restaurateurs,” says Majety.
With a presence in eight destinations in India — Bengaluru, Chennai, Hyderabad, New Delhi, NCR, Pune, Mumbai and Kolkata — Swiggy claims to have done an average of 89,000 daily orders in July.
Market domination by Swiggy didn’t deter others from seizing opportunities in this budding space. The year 2015 excited many other entrepreneurs to the hyperlocal delivery scene. Another name that boasts of superior delivery services in Mumbai is Scootsy. However, while most apps focused on food delivery, Scootsy went a step further to list an array of categories on the app.
Its categories range from restaurants to gourmet food stores, books, gift shops, sports goods, fashion boutiques and items for kids. Users can avail of delivery (within the day) of a range of products via the app, which the company says no other app is doing. Speaking to Sandeep Das, founder and chief executive officer at Scootsy, gave an understanding of the industry and of Scootsy’s business model. “In 2015, there was a lot of excitement around the hyperlocal space. When we were analysing this segment, we realised that no one brand was focusing on a curated restaurant base or delivery for a variety of sectors. There were a lot of companies focusing on aggregating food vendors without any level of curation. In this age where our days are devoid of disposable time, people are looking for convenience and instant gratification, not just for curated food that people would like to eat, but for items across the board. Scootsy came into being once we understood this need.”
Its customer base of 2,00,000 spends an average of `900 per order. Restaurants work with Scootsy to design custom menus for its discerning clientele. The app clubs them into various categories for easy browsing. It’s constantly adding and promoting new stores too that allows customers to discover fresh trends. Scootsy has targeted a premium segment with its exclusive offerings that includes brands like ROYCE’ chocolates, Guess watches and Nespresso. You can also find a number of boutique, organic and fair trade companies here.
“The biggest differentiators we have are the curation of the products on our app and the offerings we have from vendors exclusive to us or menu’s created just for us,” says Das. “We have made a conscious decision not to charge our customers a delivery fee. Our revenue comes from a commission we charge our vendors for every sale through Scootsy.” Recently, in an effort to minimise losses, it added a clause that only orders above ₹250 will be accepted.
This April, Scootsy raised a whopping US$3.6 million in the Pre-Series A round led by venture capitalist, Agnus Capital and investment company, Khattar Holdings. It is growing at a monumental rate of 40 per cent month on month. According to Das, a number of restaurants that were once shy of being on-board food ordering apps have opened their doors to them. In India, Scootsy’s next target cities are Delhi, Pune and Goa. It is also eyeing global expansion in the UAE and Southeast Asia. “Currently, we are doing 1,00,000 orders a month from around 1,500 partners across categories that we have collaborated with,” says Das.
Another app that’s associated with the business of food is Zomato. It made a late entry into the food delivery scene — but one that was much awaited. Zomato Order has integrated two functionalities into one app — bringing together a restaurant search engine with food delivery. It has also gone the extra mile where it allows users to reserve tables at restaurants through the interface and post reviews of their experiences. Only recently, Zomato partnered with Ola Cabs, the Bengaluru-based Indian taxi aggregator company. This partnership enables certain mutual benefits for users of both the apps. Zomato app users can book Ola rides and also pay for orders through Ola Money (e-wallet by the cab company), across partner restaurants of Zomato.
This year marked the entry of an international giant into the food delivery sector — UberEATS. After a successful stint in taxi aggregation, Uber first launched UberEATS in 2014 in Los Angeles, as an extension from the rides’ app. “In December 2015, we launched the stand-alone UberEATS app in Toronto and have been growing rapidly since. UberEATS is now (since this year) available in 78 cities and 26 countries around the world, including India,” says Viral Jhaveri, general manager at UberEATS.
The international food delivery app has partnered with over 40,000 restaurants worldwide. Perhaps this makes it more relatable to travellers who visit India on business. It’s a familiar app from a credible source that the well-travelled kind is used to. When it comes to the local market, UberEATS has a long way to go until it expands its presence pan-India. In India, UberEATS is currently available only in Mumbai.
Jhaveri adds, “The food delivery business in India is a US$15 billion industry and growing. We know there is a huge appetite in India for the ease and convenience of food delivered right to you at the push of a button. UberEATS has been warmly received by consumers, restaurant partners as well as delivery partners because it brings together food culture, technology and economic opportunities.”
In India, it’s definitely a crowded hyperlocal food delivery scene, with a few distinct players who have made their presence felt in only a couple of years. It’s only a matter of time before these apps become a way of life, which they have, for many, especially amongst the young professionals.
