Food delivery apps in India: wherein lies the success strategy?

Abstract

Purpose The purpose of this study is to understand the evolution, current competitive scenario, and future direction for the food-tech business in the Indian market. Design/methodology/approach The paper is based on press reports, industry reports, and secondary information about companies based on interviews of CEOs, analysts, industry trend watchers, and academicians. Findings The incumbents are competing on the basis of various parameters such as capital infusion (especially, funding), tie-ups with restaurants, customer loyalty, fleet size and management, and management of employees. High growth is driving volumes for all companies, although there is lack of differentiation in offerings. Companies need to build customer loyalty and seek diverse monetization models for profitability in the future. Research limitations/implications First, food-tech companies need to identify means of differentiation to gain competitive advantage. Second, customer loyalty is the key to long-term profitability and firms need to identify ways to build it. Promotions and offers cannot build loyalty. Third, firms would need to expand into different types of monetization methods, such as cloud kitchens, B2B food delivery services, to build revenues and profits. Practical implications Incumbents and prospective entrants in the food-tech industry need to understand the structure of the industry and the structure of competition to be able to succeed in the long term. They need to understand that promotions cannot be a differentiator and that funding will dry up. Therefore, it is critical to identify means of differentiation to build a loyal customer base. Social implications The food-tech industry in India has strong social foundation. More than 50 per cent of the Indian population is below the age of 25, the percentage of working population is increasing in India and so are income levels. In this context, the food-tech business is important as order outs are increasing. This, however, has also led to problems in the workforce for such startups as companies do not want to invest in employee training, safety or work conditions owning to high attrition rate because of the standardized nature of the job. Originality/value This paper makes an attempt to assimilate information about the progress of the food-tech industry in India in the last few years. It attempts to identify various factors that decide the nature of competition among incumbent players. It also identifies what factors these incumbents need to bear in mind while looking ahead.

Review of Online Food Delivery Platforms and their Impacts on Sustainability

“…Moreover, in 2018, Eleme in China, spent three billion yuan (US$443 million) over three months in a successful marketing strategy to increase its market share to more than 50 percent of the Chinese market [16]. Despite online FD being very strong in some regions, as a whole across the world online FD is in the early stages of market development, and it will require considerable investment to fund promotions and campaigns and to provide subsidies to participating restaurants [17][18][19][20][21]. For example, a restaurant may hold a campaign on an FD platform, in which a consumer obtains ¥8 as a discount if the total amount ordered reaches ¥20.…”

“…While there is no doubt that the online FD industry has provided many jobs, especially in the delivery sector, there has been concern expressed about the poor working conditions that delivery people are subjected to, including the standardized nature of their job, their high workload, the limited training many receive and the risks they experience to their personal safety during the process of delivering the food [33,34]. These limitations mean that while many job opportunities exist for food delivery people, job satisfaction is often low, and there is a high attrition rate [18].…”

Exploring governance issues between online food delivery platforms and restaurant partners in India

“…Apart from the high commission charged by aggregators, there are other important strategic governance issues identified by the study, such as information asymmetry, opportunism, control and trust deficit. Despite these issues, most of the partners continue with the platform to be discovered by a large pool of users who prefer to order through these platforms to get discounts (Meenakshi and Sinha, 2019).…”

A novel extended design thinking approach and predicting antecedents of food friend application acceptance during the COVID-19 outbreak

“…During the past 4–5 years, food delivery business has been growing fast in developing countries, such as Thailand, India and Malaysia (Kitthandeachaorn, 2016; Meenakshi and Sinha, 2019; Yuchen, 2020). Partly, it is a result of wide internet access with portable devices that has changed the eating habits of consumers, as they can pick up a mobile phone and order food through an application quickly and easily.…”