20 Trends to watch out in Online food delivery space –
- Monthly earning of riders should correct to 12000-15000/month in medium term from currently 40,000+ once delivery apps feel trigger of financial stability (Same like Ola/Uber which have tried to rationalize cost, margines and incentives).
- Using Predictive Modelling and deep analytics to show personalized restaurant/food options on first scroll basis user persona
- P’ships with famous restaurant brands to create exclusively available dishes e.g. McDonalds offering exclusively curated burgers
- Apps will soon monetize studies like user likings, Interests , searches, food value chain, underserved requirements for a particular cuisine, etc in an area from big data they are generating by collaborations or building other verticals of business
- May consider opening their own cloud kitchens based on their own studies and deep analytics so that they remain present in complete value chain for maximization of valuation for investors
- Some of tiffinWalas may reshape into Cloud kitchens with fix budget food menu options (With 25-30% premium) as households in metropolitans develops more affinity with food delivery options coupled with aversion to cooking at home
- Delivery apps will push pre- ordering habits, multiple deliveries by riders in one-go with weekly or monthly subscription model to achieve economies
- Highly discounted budget menu might become norm across platform. (Like Swiggy Pop which provide limited menu with assured scale and zero delivery charges) – Restaurant will benefit from Volume and anticipated demand for the items
- Drones deliveries is still 4-5 years away in India at least thanks to restrictive govt policy towards drones usage, issues with pin-pointing address and cheap labour available for delivery
- Model sustainability in tier-3 cities like Mathura, Davangere etc is still a big question mark. Swiggy/UberEats may consider restaurant fulfilled deliveries as a pilot in such areas to sustain growth and managing cost synergies
- Innovations in Packing – As per studies 10-15% orders increase if restaurant delivers with innovative packing. Non-Plastics packing for curries is still a challenges. So we might see a lot of action here like Zero-Plastic Cutlery, spill proof customized packaging, pulp paper trace, recyclable cutlery etc
- Fragmented delivery brands like Box8, Faasos etc might have to refocus theirs strategies to develop synergies with marketplaces like Swiggy instead of their own delivery apps/riders to remain afloat. These might emerge as sub-brands of food delivery startups with consequent acquistion
- It is a strong possibility that these food delivery startups might diversify to meet kitchen/grocery setup needs ensuring that full value chain is served & controlled by them. It can come in more differentiated and customized options like delivering Sprouts, Shakes, Nutritional Juices rather than conventional grocery delivery of fruits and vegetables thanks to their command over food preference and restaurants
- Converting into full-fledged One Stop Health, Fitness and Nutrition Platform is also a vision for which many of such startup might aspire in long term. P’Ship or acquisition of excercise/fitness apps (found in 35% Mobile phones), health monitoring apps, exclusive healthy food eateries delivery to tap health consicous segment might begin sooner than we expect. Initially P’Ship can be on both affiliate or affront cost model
- AI algorithms to match 2-3 deliveries in one-go ensuring no delays in delivery to attain cost synergies. Pre-ordering & Pre- decided menu should help a lot in this cause
- Regular food festivals/events like BigBillion Sale etc partnering with multiple brands is definitely on the cards
- There is no reason for restaurant fulfillment deliveries to exist in such apps after a year. They are against cost economies, involves more support involvement for late deliveries. So soon your neighbourhood restaurant might take orders only over delivery apps
- Apps may consider displaying approx nutrients contents like Calories, proteins etc against each dish. These days people are getting more health conscious about their eating pattern
- Multiple Mergers/Acquisitions are bound to happen. Best one for the industry would be Swiggy-Zomato – of course – if allowed by our great CCI
- Moreover, more power to customers is on horizon. Many may offer more choices over spices, toppings, add-ons etc. So don’t forget to add Pineapple topping on Aloo Paratha next time..!
Basically, Profitability for next 2-3 years is out of the question. All players will continue to target next 50M users with cash burn strategies and improves their cost efficiencies in delivery when Food Habits are fastly changing in Urban India ( Some of the attributes are Working Couple, Health Conscious families and fitness frenzy all over).
Overall, when 4 Giants (Swiggy, Zomato, UberEats, FoodPanda) and many small players fight it out in highly competitve Indian market who gets to win and how battle is fought is going to be no less intriguing and bloody than Ultimate Game of Thrones’s Battle Beyond Wall.
Just wait and watch (And Don’t forget to Order Popcorn.!).!
[By Himanshu Khandelwal, a guy with Digital blood. I love analyzing startup health and business models.]