Running an Online Food Delivery Business is still a Challenge in India

To avoid direct competition with Zomato, Swiggy, you can choose a different business niche in the online food delivery industry
Running an Online Food Delivery Business is still a Challenge in India
Image credit: Shutterstock
Pizza
Guest Writer
Digital marketer & e-commerce consultant at FATbit Technologies
3 min read
Opinions expressed by Entrepreneur contributors are their own.

You're reading Entrepreneur India, an international franchise of Entrepreneur Media.

The online food ordering and delivery business model is booming India’s e-commerce industry. You very often see Uber Eats, Zomato, Swiggy delivery boys doing their job. According to stats, there is an increase of 100per cent in online food orders in the past 1-2 year. So it is worth to say that online food ordering and delivery business is a hot business idea at this time and it is expected to go up with each passing year.

However, things are different at the ground level. The last month, Zomato released his annual income stats and a few things were very surprising in that report. Acc. to Zomato, their revenue for FY2019 is $206 million. Zomato recorded the highest revenue in 2019 as compared its revenues of $68 million last year. Before you get excited, you may need to know how much Zomato had spent on marketing in FY2019 and it is $500 million. Acc. to Zomato they are losing 25Rs per delivery. So you need to decide, is it really Zomato was profitable in FY2019. Maybe you will say No, but Zomato is happy with its progress and the company said we are focusing on customer LTV (Lifetime value).

Zomato is happy with its progress because they have the funding from different companies and Zomato operates in 8 different countries. Zomato could afford a loss of $294 but certainly, a startup can’t afford that kind of loss.

So, starting an online food delivery startup is still full of challenges in India. One side there is a challenge of competing with names like Zomato, UberEats, Swiggy, etc. and another side the Indian consumers’ buying behaviour where people want quality food at a nominal cost.

However, in this stiff competition, there are some online food delivery startups in India which are doing reasonably well.

Some reasons behind the above startups’ growth & come with the following insights:

  • Start Hyper Locally:

Like the above food delivery startups, you can start your online business in the hyper-local market. Once your business gets started running well, you can expand it to other regions

  • Unique Business Models:

To avoid direct competition with Zomato, Swiggy, you can choose a different business niche in the online food delivery industry. For example, you can start an online catering service, food delivery business for senior citizens, etc.

  • Provide Convenience to Users with Mobile Apps:

Since the invention of mobile apps, online food delivery business has witnessed phenomenal growth.  According to stats, one-quarter of smartphone owners (24per cent) regularly use food delivery apps, such as Postmates and Uber Eats.

  • Rank high on Google:

Though people’s buying behaviour has changed much in the past few years but still to find a nearby service provider, Google is the best platform.

  • Grow with Word of Mouth Marketing

There is nothing new at this point. But the positive word of mouth marketing can do wonders for a startup. Deliver the best experience to your customers, and for sure, they will recommend your services to their friends & relatives. You can find many positive reviews for Diet Delite and Cure.fit on the web.

More from Entrepreneur

Get heaping discounts to books you love delivered straight to your inbox. We’ll feature a different book each week and share exclusive deals you won’t find anywhere else.
Jumpstart Your Business. Entrepreneur Insider is your all-access pass to the skills, experts, and network you need to get your business off the ground—or take it to the next level.
Create your business plan in half the time with twice the impact using Entrepreneur's BIZ PLANNING PLUS powered by LivePlan. Try risk free for 60 days.

Latest on Entrepreneur