Foodpanda Promises To Deliver Food In 45 minutes Or Money Back

Foodpanda has introduced “Express Guarantee” service that promises to deliver food within 45 minutes or money back.

The service will commence from Delhi and will foray in Pune market. It has tied up with around 900 vendors in Delhi NCR and Pune and some of the key partnering brands are Burger King, Wendy’s, Biryani Blues, Eatsome, Subway, Ammi’s Biryani, Southy amongst others. Over the next three months, foodpanda plans to take this service national through a partner base of 1500-2000 vendors.

For this service, foodpanda has selectively tied up with restaurants where it uses its own delivery fleet. This means customers will reap the benefits of piping hot food, reduced waiting time and increased convenience. In case of a delay, foodpanda assures cashback to customers which is subjective to the delay and its cause.

Saurabh Kochhar, CEO, foodpanda, India, says, “Customer experience is the core of our business and we constantly strive to innovate and improvise on our offerings and services. The new service is a result of our constant effort to ensure timely delivery of food at the consumer’s doorstep – for which we have streamlined our processes and introduced robust systems and matrix to ensure an efficient end to end service within a timeframe of 45 minutes.”

Foodpanda has channelized its processes and uses proprietary technology to track deliveries from the restaurants to the customer’s door. The company has installed robust analytics systems that will not only ensure time management of the fleet but will also forestall and prompt the team of any delays. Currently, the company’s delivery arm fulfills around 30% of vendor portfolio and was launched about a year ago.

Foodpanda Lays Off More Than 300 Employees In India

Foodpanda which operates in more than 30 countries, has laid off more than 300 employees from its India unit. The company employed nearly 2,200 people and the layoffs will constitute 15% of the total workforce.

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The company has reorganized its business from technology to processes to customer service and also said that no further layoffs are planned in the near future.

The decision was taken after 98% of automation rate was achieved in order processing which will enhance the efficiency of operations.
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#IndianStartupData : Foodpanda Records Revenue Of INR 4.7 Cr, INR 36 Cr Loss In FY 14-15

[Editor Notes : Nothing is as powerful as data and these articles are part of our coverage of #IndianStartupData – i.e. an overview of financial performance of selected Indian startups with a hope that it gives you a good picture of the companies and the ecosystem in general.
Our Mission : A PR-less startup ecosystem which thrives on great products and services!

Foodpanda is not an Indian startup – but definitely an important player in food space.]
indianstartupdata

Foodpanda (Pisces eServices Private Limited) has reported its latest revenue figures for FY 14-15.

The company earned a revenue of INR 4.7 crores in FY 14-15 compared to INR 69 lacs the previous fiscal (580% growth in revenues). The losses grew 5 times from INR 7 crores to INR 36 crores in the same period.

Foodpanda India : Financial Performance

The revenue from operations stood at INR 4.6 crores. This includes ‘Commission from restaurants (98%), ‘Income from Marketing’ (1.1%) and ‘Income from Registration’ (0.9%). Following chart depicts their year on year Revenue from PAT since inception.

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The expenses for the company were INR 41 crores in FY 15 (INR 7.7 crores in FY 14). The loss for the year stood at INR 36 crores, whereas the accumulated losses over the three year stood at INR 47 crores. The accumulated losses have eroded the net worth of the company. The net worth as on 31st March, 2015 was a negative of 2.7 crore rupees.

After March 2015, the parent company has infused around INR 66 crores of funds in the company.

  • The major expense for the company was ‘TV and Radio Advertisementexpense, which stood at INR 18 crores (44% of the total expenses). This particular expense and a lot of other apparent discrepancies were discussed in detail in this article by Mint.
  • Other major expenses were ‘Discount Voucher’ expense at INR 8.3 crores (20% of expenses) and employee expenses at INR 6.4 crores (16% of expenses). Following is a breakup of the expenses.

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Interestingly, by the financial year end, Foodpanda identified some of the much talked about “certain case of restaurants which were non-existing or which were misusing the company’s discount vouchers by generating fake orders” (as mentioned in their Auditor’s report).

The company puts the loss due to these frauds at INR 7.6 lacs and calls it “not material in comparison to the scale of operation of the company”. This loss is shown under the expense head of ‘Discount Voucher’.

The FoodTech scenario in India

The following graph benchmarks Foodpanda revenue and losses against some of its major competitors in the food tech industry.

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While Faaso’s (2010) and Zomato (2010) have been around for more than 5 years, Foodpanda (2012), TinyOwl (2014), Swiggy (2013) are relatively newer players. Foodpanda claims to be present in 100+ cities compared to Zomato in 10,000 cities (across 23 countries, however, primarily it is a restaurant discovery platform), Faaso’s in 10 cities, Swiggy in 8 cities and TinyOwl in 6 cities.

Food-tech has been a heavily funded sector so far and almost all key players have raised multiple rounds of funding. Following chart illustrates the funding of key players in the sector so far.

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Of late, Foodpanda has been delving into several new service offerings such as Corporate Food ordering service and food delivery on trains with irctc. Zomato launched its food ordering app this year, which directly competes with Foodpanda’s business. However, Zomato has an edge over its competition due of its long presence and a deep penetration in the market through its restaurant listing business. Competing with Zomato and other upcoming players and apparently having a lot to fix at home, Foodpanda seems to be in for a tough ride ahead.

Also see: TinyOwl Revenue For FY14-15.

[About the author: Vishal and Anchal form the team that runs the Tofler blog. They like to explore and track companies, their performance and senior management. Tofler (tofler.in) is a Business Research Platform.]

Foodpanda Will Soon Deliver Meals To Train Passengers

Foodpanda will soon start a pilot with Indian Railway Catering and Tourism Corporation (IRCTC), enabling consumers to order meals through foodpanda app. Foodpanda will deploy its own delivery fleet to fulfil all deliveries.

The pilot of this proposed partnership is being planned to be launched at the New Delhi Railway station and after successful roll out in the metro city, the service will be extended to more cities like Mumbai, Bangalore, Pune and Chennai in due course of time.

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The customers will have the choice to order meals at-least 2 hours in advance of the travel. The delivery will be aligned to the train arrival time at the station and consumers can pay for the order in advance online or make on the spot cash payment as per their convenience.

Saurabh Kochhar, Foodpanda, CEO, said, “Foodpanda is an innovative business model which caters to an important consumer need. Our association with IRCTC will be an offering which addresses a huge consumer need prevailing for years. For long, consumers had limited food options to choose from while travelling with Indian railways but the newly launched e-catering service by IRCTC (approved by Ministry of Railways) is set to change the way Indians eat while travelling. We are excited to begin action with the Delhi station by December and are looking forward to extending this offering to other stations like Mumbai, Bangalore, Pune and Chennai in due course of time.”

Foodpanda Introduces Corporate Food Ordering Service In India

Foodpanda has launched a corporate product specifically targeted at companies offering to pay for meals in the office. The service is already available to corporate customers in India, Singapore, Hong Kong, Indonesia and the Philippines, with more of foodpanda’s 40 markets to follow.

Companies will be able to manage and control budget rules for employees by setting budget allowances, order frequencies, dates and times. The service makes it much more convenient for employers to control budgets, setting maximum order values or setting different budgets for lunch or dinner, or weekday and weekend orders.

For employees, the new service will allow group orders to be placed with colleagues, shared orders to merge allowances, as well as payment of remaining amounts with private credit cards. It eliminates the need to fill out expense reports and wait for reimbursement.

“We are excited to roll out the new product, a more convenient management of orders for both companies and employees. Studies show food based perks as an important factor that helps boost employee motivation. We are happy to support this as catalyst,” says Saurabh Kochhar, CEO foodpanda India, CBO foodpanda global.

Foodpanda Suspected Of Charging Extra VAT Without Customer’s Knowledge

After two law students filed a complaint alleging that Foodpanda was levying extra VAT on customers, the Delhi High Court has instructed the Delhi government to investigate into the issue.

Justice Rajiv Sahai Endlaw ordered the Department of Trade and Taxes to look into the complaint within three weeks. The department was also instructed to take action in three months if the allegations were found to be true.

Foodpanda’s CEO Saurabh Kochhar told to ET that the company hadn’t received any notification regarding the Delhi High Court order.

Final year law students Pranav Jain and Aroon Menon told in court that they had come across several instances of customers paying excess taxes to eat eateries and online food portals aggregated by Foodpanda.

They also have designed a website called http:www.kitnatax.com to help calculate the exact amount payable for a meal in a restaurant or delivered to their doorsteps.

“Over the course of time and usage of the website and application (app), it was discovered that numerous customers of Food Panda website or app were being charged taxes that were wrongly calculated leading to customer paying more to FP than was actually required as per law,” the petition said.

The petitioners’ representative told the court that his clients placed an order on two occasions from two different eateries via the website’s app— they discovered that the VAT price on both the instances were charged wrongly.

Instead of calculating the tax as a percentage of the sub-total, it had been determined on an amount that included the sub-total and the service tax.

A service element already being taxed by the central government was being re-taxed by Food Panda itself—this violates the Delhi Value Added Tax Act 2004, says the petition filed by the student lawyers.

The students said that they had complained to Food Panda about the issue, but never received a valid response from the team, forcing them to take legal action.

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