Business Communication Research Project

How efficient is the food delivery system in Ranchi?

Submitted By:

Kaustubh Sawant M178-18

Pradnya Salve M174-18

Shubham Tiwari M186-18

Sourav Saha M195-18

Surbhi Kumari M176-18

Shrikumar Venkidesh M187-18

 CONTENTS

1. INTRODUCTION………………………………………………………………..…………………………………..

2. METHODOLOGY………………………………………………………………………………………………….

1) PRIMARY RESEARCH

i. Questions asked to the restaurants………………………………………………

ii. Questions asked to the consumers………………………………………………

iii. Questions asked to the delivery service providers…………………………

2) SECONDARY RESEARCH

1. RESTAURANT
ANALYSIS…………………………………………………………………………………

i. Seasons……………………………………………………………………………….

ii. 123 café…………………………………………………………………………….

iii. Royal Retreat…………………………………………………………………..

2. APP SURVEY…………………………………………………………………………………

i. Shuniz………………………………………………………………………….………

ii. Foodoor……………………………………………………………….……………

iii. Zomato………………………………………………………………..………………

iv. Delivery on wheel………………………………………………….……

 INTRODUCTION
The food delivery service in Ranchi is neither a very lucrative business nor is preferred
around much. The main reason is less demand for the service. Not many food delivery
companies want to invest much in this business here due to fear of encountering losses.
Hence, we don’t see the big players like Food panda and Swiggy as popular in Ranchi as they
are in other big cities. However, there are few local food delivery companies that are
present including apps such as Shuniz, Delivery on Wheels, Foodoor, etc.

Usually, the local delivery services, and also the delivery services of the restaurants have a
circle of area where they deliver. Major restaurants in Ranchi have their own food delivery.
They deliver through “on call” orders. They have either one or two delivery boys depending
upon the demand they face. The restaurants face demand from all the areas of Ranchi and
the demand is more from the areas where there are more restaurants. They extend their
areas a bit with some amount of additional fee, but the regions beyond which they do not
make much profit, are the ones that are left out. Because of this, we see a very varied
dispersion of delivery services in Ranchi, as in the places with a high number of restaurants
are the ones that have more delivery options.

Also, there is not much competition in the market due to most of the delivery services
sticking to their own zone. Now with the latest entry of Zomato, things might get little
competitive in the future, but so far, Zomato is still laying its foundation. The issue with
Zomato is it charges both the customer and the restaurant high charges for delivery.

We found that Khelgaon area is poorly catered by these businesses. Most f the restaurants
in Ranchi find it inconvenient to deliver to this area as it is situated far off from their
location leading to more losses than profits. The closest to Khelgaon where they find
delivery not making losses are Booty More.

With the growth in disposable income of the people, the consumer spending on food
industry is increasing very rapidly. The advent of digitization and various payment options
available has made this growth exponential in tier 2 cities as well. Prior to 2016, 80% of the
online food delivery market share was concentrated only in the top 5 cities of India.
However, now these online platforms are expanding horizontally and are competing among
themselves to acquire a larger customer base in tier 2 and tier 3 cities of India. Ranchi is one
city among these emerging markets for online food delivery. This reflects the change in
consumer behaviour and hence the demand for food delivery in Ranchi. The methodology
used in this report for consumer research is based on the primary research through online
form circulated among consumers, direct interviews and secondary research on the FICCI,
Forbes, and KPMG websites on tier 2 cities The research also consists of data about the
consumers from different regions of Ranchi like Lalpur, Kanke Road, Bariatu and Khelgaon.
First, a google form was floated to gain insights about the consumer demands and needs
and their willingness to pay for food delivery system.
 METHODOLOGY
PRIMARY RESEARCH

The methodology used in this report is surveying. Different restaurants from different parts
of Ranchi were surveyed with a questionnaire which is shown below. A survey of the food
delivery chains who deliver on phone orders was done through asking them questions on
the call. Secondary research was done for the data collection of online food delivery
channels like Zomato and Shuniz. A survey was also done for the customers of Khelgaon and
Lalpur by putting forward a questionnaire. The students were asked to fill a Google form
while the residents were asked orally by paying visits.

Questions asked to the consumers via Google Form:

1. Name

2. Age:

3. Do you use a food delivery service?

4. What is the mode of order?

5. If using an App, what is the preferred app?

6. If using the phone to order which is a favourite restaurant?

7. What is the frequency of order?

8. What type of food do you usually prefer?

9. What is the problem you face while ordering food?

10. How much do you spend on an average per order?

Depth Interviews:

We will also be performing depth interviews with the customers so that we can study what
are the expectations of the customers and what do they expect from different service
platforms in the core service delivery. It will also help us to understand the service gaps in
the delivery models of these services and where can they improve. Thus, it will be helpful
for the current providers as well as new entrants to adapt accordingly to the constraints of
the Ranchi customers.

Projective techniques:

Few projective techniques like word association and sentence completion will also be
performed to help add more insights to the service quality of the platforms. Thus, it will help
us to find the efficiency of these channels.

Survey conducted with restaurants and food service providers:

Questions asked to the restaurants:

1. What is the area under reach?

2. What is the minimum order required?

3. What are the delivery timings?

4. What is the maximum distance covered?

5. What are the various resources for delivery?

6. How many delivery persons are engaged?

7. Is there any impact of the advent of Zomato?

8. What is preferable to restaurant-online delivery or people visiting restaurants?

9. The ratio of the orders through phone and online modes?

10. What is the preference of customers while ordering-Cuisine, Chinese, Burger and Wraps
and Junk food, Indian food?

Questions asked to the delivery service providers:

1. A number of restaurant tie-ups?

2. Major operating areas?

3. Number of orders received per day?

4. Number of delivery boys employed?

5. Areas of major demand?

6. Several offers made by the app?

SECONDARY RESEARCH

Restaurant Analysis:

We surveyed 4 restaurants in Lalpur area (Seasons, 123 Café, The best, Oh my Bong) and 2
in Booty More (Royal Retreat, Dawat inn). But only the following three restaurants were
cooperative in giving us quality information needed.

1. Seasons

Seasons is a very popular family restaurant situated in Lalpur. They have around 23 staffs
including cook, waiters and managerial staffs. They do food delivery mainly through 3
mediums: on call (personally sending staff). In case the area is not within 3kms of radius,
they have a condition of a minimum order of 500 for any delivery and they give the estimate
of delivery time to be 1-1/2 hr based on the availability of delivery staff. They also take
orders via the apps Shuniz and Foodoor. They have not yet collaborated with Zomato. As per
seasons, their main revenue comes from the restaurant business and not delivery.

2. 123 café

123 café is a newly opened café in Lalpur area which mainly serves snacks and beverages.
The most popular crowd here is the college-going ones. They used to deliver within 2 km of
the radius when they started the restaurant. They used to receive 3-4 call orders a day.
After they collaborated with Zomato, their area of reach increased along with the number of
orders each day. Now they receive 15-20 orders a day. Even 123 café agrees that online
delivery for them is less profitable as the number of orders is not very high and Zomato
takes 18%of food value that they deliver which is quite high. As Zomato charges from
customers as well, they are the clear winners in terms of earning a profit. For 123 café, they
have set a minimum order price of 150 for delivery via Zomato.

3. Royal Retreat

The third restaurant we surveyed was Royal Retreat near Booty more. The kind of food
available includes continental, Indian and Chinese It is a listed restaurant on Zomato and
Shuniz and is one of the main restaurants in this region. Most of the people from Khelgaon,
stadium hostels and army cantonments prefer ordering food from Royal Retreat. While the
restaurant has its own delivery system for regions near booty more for delivery to Khelgaon
it must rely on mediators like delivery on wheels or online channels like Shuniz. Again, here
also the restaurant feels that the delivery orders are not giving them any significant profit
margin, but they feel it is okay as they are not losing either. Their main revenue generation
stays from the restaurant business only. One of our observations from surveying other
restaurants and cafes in this area was, cafes have more online delivery counts because they
serve quantity for 1 person and the pricing is like that. Family restaurants menu items
usually have quantity served for 2-3 people, so people ordering online do not find it feasible
as they always need to gather a group of people while ordering so many amounts worth
food.

Food Delivery Apps Survey:

1. Shuniz

Shuniz has tied up 35 restaurants in Ranchi. It receives 50-60 orders per day and around 15-
20 orders from Khelgaon. The major areas where they receive their orders are from colleges
in and around Ranchi like BIT Mesra, law college and other residential areas like Naamkund.
They operate within 15-18 km radius from the Ranchi central radius. Shuniz employed 10
delivery boys. They accept orders from two modes on-call and the mobile app. Delivery
charge of 30 rupees.

Offers provided by Shuniz:

• Fast delivery
• Live order tracking

• Easy payment options

• Celebration offers

• Delivery despite extreme climatic conditions

2. Foodoor

Foodoor is the food delivery app which serves from 18 restaurants in Ranchi. From the data
we have gathered from the Foodoor app we found that it receives 30-40 orders per day. It
serves area under 5km radius in Lalpur and it also delivers to Khelgaon in Ranchi. They have
employed 5 delivery boys. Foodoor accepts an order in three modes which are on-call,
website and the mobile app.

Offers provided by Foodoor:

• Free delivery

• Cash backs for every order placed

• Discount on every order

• Seasonal discounts provided

3. Zomato

As per data listed on the website Zomato is tied up with 443 places in Ranchi which include
cafes, restaurants which include breakfast, lunch, dinner and delivery. Zomato is currently
serving only areas in and around Lalpur, Hindpiri, Kanka, Doranda, Kadru, Harmu, Ratu,
Bariatu, Kanke, Upper Bazar, Ashok Nagar, Morabadi, Hatia, and Ahirtoli. It doesn’t serve
major demand areas like Khelgaon and BIT Mesra. As per data collected from restaurants,
Zomato charges 18 percent to the restaurants for the delivery services. They accept orders
through website and app.

Offers provided by Zomato:

• Seasonal offers provided

• Fast delivery

4. Delivery on wheel

Delivery on wheel is the food delivery app which has tie-ups with 10 restaurants in Ranchi.
From the data we have gathered from the delivery on wheel app we found that it receives
10-20 orders per day. It serves areas under 5km radius from the central Ranchi. They have
employed 5 delivery boys. Delivery on wheel accepts order from the mobile app. Delivery
fee is dependent on the distance from the restaurant.