The Epic Rise Of Swiggy, Zomato & Other Food Startups In India!

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Food Startups in India [Hyper-Local]

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Food startups in India have garnered the status of industry unicorns in a short span of time in the Indian market. With established firms such as Uber & Ola venturing into the food tech industry, the sector is sure to garner a lot of interest and investment.

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Source: RedSeer Consulting

Zomato, Swiggy, UberEats, TinyOwl & Faasos – All these food-tech startups have become single point sources of hyperlocal food discovery and delivery.

Zomato & Swiggy Lead The Market!

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From fighting for market share to fighting for VC interest, Zomato and Swiggy are going head to head for the lion’ share in the Indian market. The total VC[Venture Capital] & PE [Private Equity] funding for both the platforms is around $900 million.

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Also, Domino’s has clearly reinvented itself as a major food-tech player. It is India’s largest international food-chain which has a great emphasis on food delivering services.

Also, by localising food options such as Tandoori Paneer & Tandoori Chicken flavours, companies have gone down right hyperlocal!

The Reason Why Food Tech Startups Are Winning In India!

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1. App & Smartphone Penetration In Urban India

Low-cost smartphone penetration and increasingly cheap internet plans have helped people adapt to the new online food ordering apps and services.

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When you add discounts and offers to further sweeten the deal, people usually prefer ordering online rather than physically visiting eateries or restaurants.

2. Different Cuisines & A Seamless Experience With HyperLocal Options!

The whole experience of ordering food online when you are in a workplace or home is often a seamless experience. From online payments to food tracking, food ordering apps provide a single platform to explore and order food.

With food from hyperlocal restaurants, eateries and even high-end diners, these platforms give a customer a great option to order at their own convenience, in the comfort of their own space.

3. Services Such as Zomato Gold & Swiggy Select

i) Zomato – Table reservations through Zomato i.e. Zomato Book and subscriptions such as Zomato Gold and Zomato treats are new ways to keep the customer engaged in the platform. Zomato Book which was launched in 2016 and became the largest reservations player in India within a month of its launch.

Same goes for Zomato Gold Subscription which saw 26,000 registrations within 8 hours of its launch in Nov 2017

ii) Swiggy – Swiggy answered back with Swiggy Access, a new programme which focused on new hyperlocal kitchen spaces. The kitchen spaces are based on plug-n-play model and operate on a commission sharing basis with its partner eateries.

Upcoming Expansion & Challenges!

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With limited infrastructure and limited market insight, startups often find it difficult to ensure smooth functioning of their businesses. Challenges often come in the form of food hygiene standards, delivery times, logistics issues and service complaints. 

The challenges for major food tech startups arise due to speed, consistency and reliability of its logistics partners.

Startups such as TinyOwl have struggled despite showing great promise at times! It later merged with logistics company RoadRunnr to save its operations.

i) Competition –  Stiff competition from rival companies is another factor that challenges the expansion of food startups in India. Big players such as Uber Inc. & Ola India sideline small food startups such as TinyOwl & Faasos.

ii) Costs, Price & Quality – Keeping food quality high till it reaches the end customer is another important factor in terms of customer retention. Hygiene, sanitation and proper handling of the food along with branding another challenge for the startups.

With a plethora of options to choose from, the Indian customer is increasing being spoilt of choices when it comes to food delivering services. Food from local ‘dhabas’ to high-end restaurants is only a touch away on your smartphones, all due to the amazing expansion of food tech industry in India.

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