Restaurant owners breathe easy as food delivery start-ups grow in size

Key Highlights

• Restaurant deliveries dipped in the April to June period as online food deliveries went up.
• Nearly 30-35% of the business of restaurants comes from the Online Food Delivery partners
• Online food delivery industry amassed $ 300 million in 2016. 

Home deliveries made by restaurants dropped to 30% between April to June 2017 as start-ups like Swiggy, Bikeninja and Grab capture the market. 

With newer start-ups coming up with better on-time delivery rates the deliveries via restaurants dipped in the second quarter of 2017, a report by RedSeer Consulting said on July 31.

“On-time delivery of the order is one of the major expectations of the customers from the online food delivery players. Deliveries fulfilled by restaurants have lower delivery compliance as compared to those fulfilled by the own fleet/3PL partner,” the report said.

“In OND'16, the share of orders fulfilled by the restaurants was ~40% which has reduced to ~30% in AMJ'17 (April, May, June),” Foodtech expert of RedSeer Consulting, Rohan Agarwal said.

There are various 3rd party logistics players operating in different cities of India. Some of these associated with online food platforms are Delhivery, Grab, Bikeninja, Shadowfax.

“In the case of platform owned logistics, it is platform's own fleet of delivery boys used to fulfil the orders. In the case of 3PL fulfilment, some of the platforms have tied up with players mentioned above. The orders received over platform are relayed to these third party players who in turn fulfil the orders,” Agrawal added.

Another report by RedSeer Consulting showed that the food delivery the industry witnessed 150% y-o-y growth rate on the back of strong demand from top cities in 2016.

“Nearly 30-35% of the business of restaurants comes from the Online Food Delivery partners in India; this industry amassed $ 300 million in 2016 and is expected to maintain the growth rate,” the report added.