#7 Reasons Why Food-tech Startups are Booming in India
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The fate of food-tech in India appeared to be grim last year when the sector received less than $80 million funding, compared to $500 million it had received in 2015.
Many started questioning its future while others claimed it to be a bubble that was about to burst. Nevertheless, many companies simultaneously bourgeoned and introduced innovative processes in the practice of dining out, restaurant discovery and food delivery. With many players contending and fighting for a prized position on the consumers' plate, it is evident that the sector has experienced innumerable challenges.
But, thanks to Indians' undying passion for food, the food-tech segment is resurging once again.Today, it is among the fastest growing online industries in the country, driven by start-ups with improved unit economics, increasing commissions and emphasis on enhanced customer experiences. Here are a couple of reasons that are enabling the firms to emerge stronger in the game of food-tech:
1. Sustainable Sights
The war between food-tech startups is far from over but with fewer companies left in the field the competition for mere customer acquisition is not as aggressive anymore. Tech businesses are all about securing the top positions and the food-tech industry is no different. However, as the competition has mellowed, it has made way for more sustainable practices on the part of players in this industry. Rather than spending big bucks on just registering more users or app downloads, the food-tech companies that have managed to survive are now able to focus on providing better services and retaining customers. Investors are also sensing sustainability of operations and once again are pumping in capital into the industry.
2. Surge in Eating Out Culture
There has been a substantial increase in the per capita income of Indians as more and more number of adults or couples have started working in households for a living. With more disposable income at hand, the spending power onfood is becoming higher. For many, dining out, especially at premium places is a passion to pursue and food-tech businesses that are offering consumers this access are certainly here to stay. One can also not ignore the work-life imbalance and paucity of time that has been instrumental in driving people to eat out or order food more frequently.
3. Urge to Experiment with Different Cuisines
While earlier people preferred sticking to their tried and tested cuisines, today their food habits are turning adventurous. By travelling to different domestic as well as global destinations, people are getting exposed to other cultures and are willing to embrace them along with their food. Moreover, India has a cultural affinity for food and eating, especially during festive occasions. Food channels on TV and the web as well as the influence of food bloggers are also playing major roles in driving this tendency. As a result, more and more people are relying on new-age restaurant discovery platforms like Gourmet Passport to get access to the best fine dining restaurants that can introduce them to global and multicultural cuisines within their city.
4. Disrupting Food Aggregator Platforms to Ensure Convenience to the Patrons
Food-tech platforms, a decade ago, allowed people to onlyorder online. Today, there are many of them disrupting the space as food aggregators. They charge both the restaurants and the consumersanywhere between 5% and 10% for each transaction. It becomes a win-win situation for both as the food industry gets easy money and free marketing without bothering about investing in technology whereas consumers can enjoy the ample availability of options and convenience. As a result, investment is steadily pouring into the sector.
5. Paying Attention to Cashless Transactions
Post demonetization, food-tech companies have started ramping up the payment options for every transaction to help customers tide over the cash crunch or lack of change during food deliveries. Moreover, there are many startups that are focusing on their own wallet features as well as on rolling out discount vouchers, so that the consumers can enjoy their meals and pay in a hassle-free manner. This is greatly boosting their adoption.
6. Late Night Delivery Issues Being Sorted
There are many industries where people are exposed to international work environment and timings. The odd working hours lead to late-night snacking in most offices that either includes junk food or road-side snacks. Considering the potential, many new players in the food-tech industry have started offering late-night delivery of healthy meals. They are following the centralized kitchen format to ensure quick and quality deliveries and making customers increasingly dependent on them.
7. New Focus on Eating Healthy and Calorie Watching
Witnessing the rise in healthy eating habits among the health-conscious consumers, a slew of startups are focusing on helping people switch to healthier and still tasty options through their calorie watch meters. From cold pressed juices, guilt-free snacks to salads, sandwiches, and meals, these startups are incorporating healthy ingredients from different sources and using them in the best possible manner for the weight and health watchers. As a result, many fitness fanatics are making it a habit to just order from these food-tech companies, driving the culture of daily deliveries tremendously.
The new crop of food-tech startups, just like breakfast cereals, are coming up in different shapes, sizes, colours and variants. From online restaurants, food aggregators, discount partners to restaurant delivery partners, food-tech in India can be defined as any technology that helps satiate hunger. After all, for them, the competition doesn't just lie in examining and stabilizing their operations and processes, but also identifying the right opportunities for growth and profitability. While a majority of them are focusing on innovation and new technologies, the core focus should be around enhancing the customer experience to ensure a loyal customer base. Moving further, the future of this segment seems promising, yet one will need to wait and watch to judge how well the industry can shape up.