The Great Indian Food Delivery Battle

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With drop-shipping options entering the fray, the food delivery space is India’s latest battleground. As new options like Thrive and DotPe go head-to-head with giants, customers are now more spoiled for choice

“Where a consumer is present, a restaurant can follow. Facebook, Instagram, Google Lists, WhatsApp… any of these can be integrated with an ordering platform, and we teach restaurants how to do just that,” says tech entrepreneur Anurag Gupta. His non-aggregating platform DotPe, co-founded with Shailaz Nag and Gyanesh Sharma, has partnered with more than 15,000 restaurants in 300 cities in two years.

This company is tiny compared to giants like Swiggy and Zomato — Zomato boasted 1.4 million active restaurants in 2019, the year DotPe just started. But even as the giants continue to innovate, create jobs and provide essential delivery during lockdown, alternative food delivery platforms have seen a steady rise over the past two years.

The conundrum of commissions

Interestingly, they arrived on the scene to meet an urgent need, not of consumers, but of restaurants. Restaurant owners (as well as organizations such as the National Restaurants Authority of India, NRAI) have been looking for alternatives to consumer aggregation apps for years. Many claims have been made about how the deep discounts offered by delivery apps, combined with the hefty commissions they charge, have drastically reduced the profits of restaurants, bars and cafes, to the point of making business almost unsustainable.

Learn more | NRAI wants to cut out the middleman from aggregation platforms

While the NRAI announced plans to launch its own delivery platform in 2020, it was in May 2021 that the Kerala Hotel and Restaurant Association (KHRA) launched a food delivery app, Rezoy, in response to the commission charged by the largest food aggregators.

“It’s about 20% plus GST, which is 21.5% or 22% of the invoice amount. When you factor in overhead costs, which include the cost of raw materials and salaries, a restaurant owner doesn’t have much left to do to run the business. Sometimes the invoice amount [on a particular order] may not justify the commission. We had to do something to continue in the business,” says Asees Moosa, Ernakulam District Chairman of KHRA.

The Great Indian Food Delivery Battle

Platforms like DotPe and Thrive, on the other hand, charge between 1% and 3% commission per order, and have capped it at that. Thrive has been another popular option for individual restaurants in metropolitan cities. Launched in October 2020 with a restaurant partner in Mumbai, Thrive has built its base to 1,500 restaurants by February 2021.

“That’s when we launched our 2.0 release, which has seen our numbers double in just the past two months. We now have over 3,000 restaurants on board,” says co-founder Dhruv Dewan.

Dhruv does not view Thrive as an alternative to Swiggy or Zomato. “I think in the near future, direct-to-customer platforms and aggregators will co-exist,” he says, “But for anyone building a business from scratch, a direct-to-customer option makes more sense than ‘an aggregator.’

Access to consumer data is one of the main reasons some restaurants choose Thrive over Zomato or Swiggy. As Gauri Devidayal from The Table, Mumbai says, “It is very difficult to run an online business if you don’t know who your consumer is, what dish they prefer and why, what problems they had with a particular order.”

Thrive gives its restaurant partner ownership of this data. “The data is hosted on our servers, because it is not possible to have a separate server for each restaurant. But the data contractually belongs to each restaurant, and they have full access to it. According to the terms and conditions, we [Thrive] cannot give a restaurant’s consumption data to someone else. We can only use it to improve our operations, such as tracking payment issues,” says Dhruv.

pizza in the delivery box, you can put your writing on the box

pizza in the delivery box, you can put your writing on the box

Asees explains how hotels are encouraged by aggregators to have different prices – for online and offline orders. “Prices [on the online menu] and portion sizes are “adjusted” in a way that justifies the commission they pay to aggregators, some also earn extra. So who gets the raw deal in the end? Our goal [with Rezoy] is that all stakeholders benefit, not just us,” he adds. The menu posted by the restaurant on Rezoy must be the one displayed at the hotel. If there is misconduct, action is taken against the hotel – they are expelled if they refuse to comply. “That’s why a few hotels don’t want to use the app because they’re used to the extra benefits,” says Asees.

Last mile delivery is another factor where today’s giants seem to have an advantage; a restaurant needs a reliable delivery fleet, knowing the alleys, shortcuts and detours of its city.

DotPe and Thrive solve this problem with a hybrid model. As Anurag points out, “The last mile delivery problem has already been solved by others – by Shadowfax, Rapido and Dunzo. We have linked up with them; restaurants have the option of using their own staff for delivery , these third-party teams, or a mix of the two.Thrive’s model is similar.

Impressario Handmade restaurants from Riyaaz Amlani – the company behind Social – recently landed a headline-grabbing tie: Mumbai’s dabbawalas are now delivering its door-to-door restaurant orders across the metropolis.

learning curve

Innovating is one thing, getting smaller, newer restaurants to understand the finer points of online operations in the midst of a pandemic is another.

The NRAI has held bootcamps to familiarize restaurants with the DotPe system in several cities.

The Great Indian Food Delivery Battle

In Mumbai, the London Taxi gastropub co-founded by Dhaval Udeshi and NRAI member Pawan Shahri doubled as an incubator program.

Learn more | Mumbai dabbawalas help India’s ‘direct order’ movement

Dhaval says, “This is the first time a restaurant has opened its kitchen to become a home delivery incubator. There is no doubt about the negative effect of the pandemic on the Indian F&B segment, especially on small business owners. New businesses that want to launch their own brand in the food industry need SEO (search engine optimization) to acquire direct customers. To make a business survive on its own, it takes several months. »

Dhaval says partnering with well-known brands is a way forward, keeping in mind the importance of SEO in reaching end customers online. “We redesigned our entire marketing strategy towards online delivery and partnered with DotPe for the same,” he says.

It appears to be several Davids ganging up on a few Goliaths, in a fight that promises to be fascinating and ultimately rewarding for patrons.

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