EMERGING TRENDS TOWARDS ONLINE FOOD DELIVERY APPS IN INDIA

Dr.S.C.B.SAMUEL ANBU SELVAN1, SUSAN ANITA ANDREW2

1
Assistant Professor, Department of Commerce, The American College, Madurai, Tamil Nadu,
India
2
PG Teacher of Commerce, Keswick Public School, Madurai, Tamil Nadu, India

Abstract --- In recent times, a growing
trend has been noticed in the usage of online
food delivery services. With the increased
usage of technology, every industry is being
re-shaped, to better serve the needs of
customers, who are the kings of the market.
Businesses which are regularly upgraded in
order to meet the evolving expectations of
customers are those that can succeed in the
long run. It is not the technology behind the
services provided, rather it is the experience
provided to the consumer using real food
technology. With this in the background, it
should be noted that even customers who
had previously preferred to purchase food
through offline means, are now turning to
online food delivery Apps to make their
purchases. The dining out culture is now
being transformed into the eating in culture.
And this trend is observed to be prominent
among youth (15 – 34), especially in the
metropolitan cities where there are constant
traffic jams and the heavy population
density, which results in even short distance
travelling being a highly time - consuming
process. The resultant effect is that a greater
number of Indian households are being seen
turning to online food delivery services as
an easier and more convenient alternative.
As the usage of food delivery Apps grows in
the metropolitan cities in India, a growing
trend is also being seen in smaller cities. It
has therefore become a necessity for online
food delivery service providers to identify
the preferences and perceptions of
consumers to enable them to meet their
expectations. Through this study the
historical background, current scenario and
possible future developments are analyzed
in order to help online food delivery services
develop better strategies to improve sales
and increase the customer base.
Keywords --- Food Delivery, Perception,
Consuming Process, Food Technology
I. INTRODUCTION
Online food ordering is the process
of food delivery or take out from a local
restaurant through a web page or an online
Application. It is similar in many aspects to
ordering consumer goods online. A
customer can choose their preferred
restaurant, type of cuisine, delivery or pick –
up and mode of payment. The payment is
either by card (debit or credit) or cash, and a
percentage is returned to the online food
company.
With individuals becoming
increasingly busy, the service provided by
online food delivery Apps allowing them to
place their order and receive delivery within
a matter of minutes, is a great advantage. In
addition to this, the online environment
offers an avenue for customers to satisfy
their impulsive food cravings. Customers
can have easy access to competitive service
providers at competitive prices and at the
same time they can also receive input from

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their peers through social media, which
helps influence their ultimate purchase
decision.
II. ORIGIN AND BACKGROUND
The origins of the online food
industry go back to 1994 where the first
online food order received was a pizza from
Pizza Hut in 1994. And the first online food
ordering service, was Worldwide Waiter
(now known as Waiter.com), was founded in
1995.
With a population of over 1.2 billion,
India is undeniably one of the biggest
consumer markets in the world today. 50%
of this population fall under the age of 25,
making India one of the countries with the
youngest population in the world.
Furthermore, it has been predicted that by
the year 2025 the number of middle-class
Indians will touch 550 million. Moreover, e-
commerce has been expected to grow from
US $2.9 billion in 2013 to a mammoth US
$100 billion by 2020, thereby making it the
fastest growing e-commerce market in the
world.
With this backdrop it should be
noted that a growing trend has been
observed showing that a majority of the fast
food demand occurs within the age group of
10 – 40 years. The recent rise in the number
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of productively employed young Indians in
sectors such as IT services has resulted in an
increase in the spending capacity of the
individuals. According to statistics provided
by the World Bank, there has been a 50%
increase in the per capita income from 2006
till date. This growing Appetite and
increased spending capability of young
Indians has made the food industry an
attractive and lucrative area in which to start
a business. With this significant growth in
the online food and restaurant service
industry, it has been estimated that the Gross
Merchandise Value of online food and
restaurant industries would reach an
estimated $2.7 billion by the end of 2019,
which is a significant leap from the $300
million in 2016.
In addition to young Indians fueling
the growing demand for the services of
online food delivery, the increase in dual
income families in urban areas of India,
where both parents work, is dramatically
changing the way people live in subtle yet
significant ways. The changes in routines,
lifestyle and food habits have resulted in an
increase in demand for easily accessible and
good quality food. It has been estimated that
almost 92% of nuclear families who seek
out fast food or take out, as against
preparing a meal at home, do so in order to
save the time and energy. Also, the increase Food Ordering’ (2011). The researcher
in the number of working women Sheryl E. Kimes surveyed 470 internet
increasing, and the increase in the amount of users and found that almost half of them had
disposable income has proved to be a key ordered food online through the usage of
demand driver. online food delivery Apps or through text
messages. The study showed that the chief
reason for electronic ordering given by those
III. LITERATURE REVIEW have ordered (users) is that they gain

The Cornell Hospitality Report convenience and control. The major factor

(2011) published an article titled ‘Online, that inhibits those who have not ordered via
Mobile, and Text Food Ordering in the U.S. an electronic channel (non-users) is a desire

Restaurant Industry’ (2011) by S. Kimes for interaction (although technology anxiety

and P. Laque in which a survey of the top is also a factor).

326 U.S. restaurant chains was carried out. It In the research paper ‘Consumer
showed that the industry was gradually experiences, attitude and behavioral
adopting electronic ordering, in the form of intention toward online food delivery (OFD)
online, mobile, and text orders. The services’ (2017), released by Vincent
advantages of electronic ordering include Cheow SernYeo, See-Kwong Goh, Sajad
increased sales, particularly through Rezaei, the researchers studied the structural
automatic upwelling and by storing order relationship between convenience
information so that customers are motivation, post-usage usefulness, hedonic
encouraged to repeat their previous orders motivation, price saving orientation, time
with a single click. Other than the cost of saving orientation, prior online purchase
installation and operation, the chief experience, consumer attitude and
disadvantage of electronic ordering is the behavioral intention towards Online Food
potential for amplifying rush time volume, Delivery (OFD) services. They concluded
with the potential of overwhelming the that customers were attracted to technology
kitchen. that could provide them convenience

The Cornell University School of through saving time and effort. Thus, the
Hotel Administration published a paper website must be user friendly and be able to
titled ‘Consumer Perceptions of Electronic process the customer's request as quickly as

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possible. This in return would enable
customers to complete a transaction quickly,
which would be both beneficial to the
customers and marketers. Having certain
discounts or promotions attracted price-
sensitive consumers, as they were likely to
choose the channel with provided them with
the best value for money.
According to Varsha Chavan, et al,
(2015), the use of smart device - based
interface for customers to view order and
navigate has helped the restaurants in
managing orders from customers
immediately. The capabilities of wireless
communication and smart phone technology
in fulfilling and improving business
management and service delivery. Their
analysis states that this system is convenient,
effective and easy to use, which is expected
to improve the overall restaurant business in
coming times.
In the study by Lee E, Lee S, and Jeon
Yon the title ‘Factors Influencing the
Behavioral Intention to Use Food Delivery
Apps’ (2017), the authors have discussed the
relationship between the determinants that
affect customers' use of food delivery Apps.
Using an extended technology acceptance
model, they explored consumers'
experiences in purchasing delivery food
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through mobile Apps. Through the usage of
a self-administered questionnaire online and
used structural equation modeling the
hypotheses was tested. In conclusion it was
found that user-generated information, firm-
generated information, and system quality
had a significant effect on perceived
usefulness. In addition, system quality and
design quality strongly influenced the
perceived ease of use, which improved
perceived usefulness, and in turn, perceived
usefulness and perceived ease of use
affected attitude toward the use of mobile
Apps.
IV. OBJECTIVES
1. To study the origin, present scenario and
future scope of online food delivery Apps
2. To analyze the benefits to the restaurants
and customers.
3. To identify the problems and prospects of
online food delivery Apps.
V.RESEARCH METHODOLOGY
This research is based purely on
secondary data. The data has been collected
through the usage of various internet portals,
magazines, journals, and the like.
VI. PRESENT SCENARIO OF ONLINE It was initially estimated that the
FOOD DELIVERY Indian Food technology industry would
reach $78 billion by 2018, but that is only
With the rise of digital technology,
one part of the picture. Despite the wide
reshaping of the service sector and increased
potential that this sector provides, many new
use of technology by service providers,
players that have jumped in without proper
consumers are getting accustomed to
legwork have either been downsized like
shopping and ordering online through Apps
Zomato or completely shut down like
or websites. With these Apps and websites
TinyOwl. At present, out of 105 Food tech
providing maximum convenience and
startups in India, only 58 are currently
transparency, consumers have now come to
operational.
expect an experience similar to what they
would receive from the outlet itself. At the outset the food technology
industry in India began with companies like
Keeping this in mind new and budding
Zomato trying to solve the problem of
Indian startups are finding that the secret
finding a good restaurant through a simple
ingredient to the success of their business,
user - friendly platform. This was followed
Food. There are now several service
by companies like Food Panda trying to
providers who are fighting to win the hearts
address the issue of ordering and booking
of consumers. Although technological
food orders from these restaurants by
developments do matter in the context of
working as an aggregator. The final stage
food technology, ultimately it is the
had companies like Swiggy handling the
customer’s food experience that decides the
issue of delivery. This basically sums up the
success or failure of these kinds of startups.
evolution of the Indian food technology
The Indian food delivery market has been
market till date.
valued at 15 billion dollars and is set for an
exponential growth. The growth of online VII. CHALLENGES IN THE
food ordering delivery platforms like ONLINE FOOD DELIVERY BUSINESS
Swiggy, Food Panda, Uber Eats, and
The main problem that results in the
Zomato are feeding the world online and
shutting down of online food delivery start -
making profits at the same time.
ups is that most of them are yet to touch the
vital part of the value chain which is the

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FOOD itself. A report published by Takeout services of online food delivery Apps rather
& Off-Premise states that 60% of customers than cooking at home.
feel that the taste of food ordered and
In a recent survey it was observed
consumed at a dine-in restaurant should be
that more than 80% of food orders not only
one and the same and 45% of customers
come out of the top 5 metropolitan cities in
want the same level of freshness.
India, but specifically through online food
Another underlying reason for the delivery services. The “dining out” culture is
failure of many online food delivery startups now giving way to the “eating in” culture.
is that they are carbon copies of one another,
Global food brands are now
and completely lacking in innovation.
strengthening their relationship with food
In addition to this online food delivery service providers like Zomato and
delivery service providers constantly face Swiggy. Recently, Café Coffee Day, India’s
the following challenges: largest homegrown coffee shop chain
launched a virtual restaurant which will
• Lack of proper logistics control –
cater to orders only through Uber. At
timely delivery issues and shortage
present, India’s online food delivery market
of delivery staff
has been estimated to be valued at $7
• ‘On the fence’ attitude of customers
billion. A large chunk of the market is
i.e. lacking loyalty
occupied by Zomato and Swiggy who have
• Inability to handle large volume of
a combined share of 80%.
orders (both dine – in and take out)
Swiggy
VIII. GROWTH OF ONLINE FOOD
DELIVERY IN INDIA Swiggy was founded in an office
space in Koramangala, Bangalore in 2014
With the tremendous increase in the
by Nandan Reddy and Sriharsha Majety,
number of vehicles and the heavy population
alumni of Birla Institute of Technology and
density leading to heavy traffic jams, which
Science Pilani. It started with one
is seen in most of the Metropolitan cities
neighborhood, six delivery executives, and
such as Delhi, Mumbai, Kolkata and
25 partner restaurants. Now it has partnered
Chennai, a growing trend has been seen
with over 40,000 restaurants across 25 cities
towards households preferring to use the
and over 13,000 delivery executives. It

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currently has a market value of $1.3 billion with Alibaba’s payment affiliate Ant
and funding of Approximately $465.5 Financial having an ownership stake of
million. almost 10%. Furthermore, Zomato has also
acquired 12 startups globally. Despite
In 2017, Swiggy was named as the
several security breaches and controversies,
startup of the year at the Economic Times
which were severe set – backs in achieving
Startup of the Year Awards 2017. The co-
their target, Zomato continues to be one of
founders, Rahul Jaimini and Nandan Reddy
the top competitors in the online food
were also listed in Forbes 30 under 30. With
delivery market. Zomato also offers
this roster in the backdrop and the best
personalized customer service, and multiple
industry average delivery time of 37
payment options. With the services being
minutes, Swiggy finds itself at the top of the
available round the clock, including
online food delivery market amidst its many
breakfast and late-night meals as well.
competitors.
Uber Eats
Zomato
The company Uber was founded in
Zomato, originally started as
2009 by Garrett Camp as a transportation
Foodiebay was founded in 2008 and later
network company. It now offers a wide
renamed as Zomato in 2010 by Deepinder
array of services such as ridesharing, taxi
Goyal and Pankaj Chaddah. By 2011
cab hailing, bicycle sharing system and even
Zomato had expanded to Bengaluru, Pune,
food delivery. The company made its first
Chennai, Hyderabad and Ahmedabad and by
foray into food delivery in August 2014 in
2012 expanded overseas to UAE, Sri Lanka,
Santa Monica, California. It gradually began
Qatar, the UK, Philippines, and South
to expand its network to other cities across
Africa. It currently operates across 24
the USA and is now located in over 250
countries.
cities.
Zomato has also come up with the
The Uber Eats App was launched
innovative concept of cloud kitchen.
separately from their App for Uber rides.
Through this innovation restaurants can
Users can read the menu, order, and pay for
expand their business without incurring any
food from participating restaurants using
fixed costs. The market value of Zomato is
their device using an Application on the iOS
now estimated to Approximately $2 billion

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or Android platforms or through a web is estimated that Uber Eats has a market
browser. Users additionally have the option value of over $20 billion.
of giving a tip for delivery. The App detects
IX. FUTURE SCOPE
the user’s location and displays restaurants
open at the time separately from those that With technology continuously

are closed. Payment is charged to a growing food delivery start – ups should

credit/debit card on file with Uber. Meals consider new business models in the food

are delivered by couriers using cars, bikes, delivery market that are growing in

or on foot. Upon ordering, the customer is popularity such as on demand delivery,

notified of the total price combining delivery restaurant and food discovery, cloud

fee and meal price. Customers can track the kitchen, full stack, and home cooked food

delivery status after the order is placed. models.

Uber Eats launched in India in May Demand Delivery

of 2017. In India, the Uber ride App is On demand delivery is the

integrated with the Uber Eats App, so that
the rider can choose to order a meal during a
ride. While it may seem that Uber was a late
entrant into the online food delivery App in
India, they claim that other online food
delivery giants in India such as Zomato and
Swiggy have cleared the way for them by
building a strong market for them.
immediate or scheduled delivery of food to
the customer; initiated immediately after the
customer has placed an order. On-demand
delivery platforms hold on to a large number
of part-time local delivery partners in order
to bring products to customers immediately.
It is the express delivery of products done
with the help of a highly efficient

Since its launch into the Indian transportation system after an online order is

market, Uber Eats has had a seven – fold received.

growth in order volume, and they add almost Cloud Kitchen

4,500 delivery partners every week. On a
A cloud kitchen is a takeaway outlet
global scale, they have almost 400,000
that does not provide a dine-in facility. It
active delivery partners. Uber Eats
functions as a production unit with space for
contributes about 13% of Uber’s overall
the preparation of food. The food can be
gross booking. According to some reports, it

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ordered online, which is the reason behind
the name ‘cloud kitchen’.
Full Stack
Food Stack food delivery service is a
brand - new concept in the food delivery
market. It is a fresh view on the meal
delivery service. It lies in controlling the
entire process, which means that the
company runs the customer interaction
management, cooking and logistics. A
customer is provided with the photo of the
dish, the list of ingredients, and the name of
the chef. The order usually comes within an
hour of the customer placing the order, or
the customer can pre – order one day in
advance.
Additionally, the market that is yet to
be unexplored is the home cooked food
model, research can be done in this model as
it is a tough market to crack and therefore
has high potential as innovation can take this
industry in a new direction. Technology and
innovation are playing a vital role in the
growth of the food delivery sector.
Technology is proving to be cost - effective
and efficient not only for restaurant partners
but also for customers on – the - go. The
focus of businesses must now be turned
towards building continuous revenue
streams and a long-term goal to evolve and
stay updated with the developing technology
trends. Companies can also work on coming
up with creating classic food in unexpected

Drone Based Food Delivery and non-traditional ways.

Drone deliveries are a solution to X. CONCLUSION

some of the logistical problems faced by With the continuous flood of

online food delivery service providers. They professionals into cities and rapid
will pick and deliver food parcels from the urbanization in India, the food delivery and
restaurant to the customer hub i.e. a landing restaurant segment are now thriving.
station located close to a densely populated Currently, several food delivery Apps in the
area. The drones have sensors that are in- Indian market are available for download on
built, and computers onboard to guide in the smart phones to order food on – the - go and
taking off, landing and to avoid objects. from the comfort of their homes. While at
Recently Zomato successfully tested its present, cash on delivery is the most
maiden drone delivery technology. preferred option of payment, but other

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digital techniques are also seeing significant to various factors such as increase in wages,
growth. less free time, and work pressure, there is a
huge market for online food delivery start –
It is safe to say that online food
ups. Therefore, it is now a waiting game to
delivery Apps are not a passing phase and in
see how, and how well, the industry
order to keep up with the growing demand
progresses.
and competition they need to constantly
examine and re-examine their operations
and processes and be sensitive to
opportunities. With consumers now
spending lesser time in food preparation due

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Innovative Science, Engineering &
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premise

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