In Depth Analysis of COVID 19 Impact on India Online Food Delivery: Ken Research

“Amidst the Pandemic-Covid 19, online food delivery companies resort to outreach programs in order to assure their customers the safety in food delivery and have also diversified to grocery delivery due to increased demand as a result of panic buying”.

COVID-19 in India has brought virtually every sector to a standstill except for essential items. All operational activities ceased since the Lockdown was announce on March 24th 2020, and many companies regardless of their size has gone into losses. Companies had to undertake certain drastic measures such as pay cuts, layoffs, suspend certain operations and restructure the organization to reduce their losses.

The rapid spread of corona virus has made the consumers skeptical about ordering food online. The result of the same has been reflected on the revenues of restaurant industry of India which witnessed 70% drop in the business since March 2020. The restaurants PAN-India have been directed to remain closed for dining. More than 95% of the restaurants in India are offline, either due to lack of staff or lack of demand thereof. The online food delivery has registered a drop of ~70% in the order volumes in the past 2 months, reaching nearly about 5mn-6mn orders per month.

As the order volumes continue to decline drastically, the online food delivery companies have started to shift their focus towards online grocery delivery in order to sustain their revenues and optimize their operational fleet. Market players such as Zomato, Swiggy and Box8 have jumped to online grocery delivery in order to cater to the increasing demand as a result of panic purchase either by tying up with grocery stores or by partnering up with existing grocery delivery platforms to support them in delivering the groceries. Last mile delivery companies such as ShadowFax and Delhivery are partnering up with FMCG, Retail Players and Grocery Shops to support delivery of essential products. Restaurant chains with big fleets are partnering up with FMCG brands to supply essential commodities. Eg: Dominoes India has partnered up with ITC to delivery essential goods and groceries.

In the wake of the global pandemic, hygiene has been the focus area for aggregators such as Swiggy and Zomato. To overcome the sentiments of the consumers, the food delivery companies are aggressively reaching out to consumers for ensuring the safety of the food being delivered by marketing their initiatives in every possible way. On one hand aggregators are offering contactless delivery and other the other hand cloud kitchen company Rebel Foods has introduced live body temperature tracker on its application. The companies are also sending out advisories to the consumers to transfer food in another container post delivery and re-heating the food before consumption. Companies have also promised temperature logs for the food handlers such as the chef, the food packers and the delivery boys to make the business more transparent. The post-pandemic preparedness is half way through for a few companies. Zomato is preparing for contactless dining after the lockdown restrictions are lifted by adding new features into their app which allows consumers to use menu, place orders directly and make payments without coming in contact with the restaurant staffs.

Although a slow recovery in the order demand for online food delivery is expected by August end, the overall orders for the year 2020 is expected to be 50%-60% lesser than total orders of 2019. The future trend in the F&B industry will be centered on health and hygiene. The restaurant industry will particularly adopt more stringent practices to ensure that both its people and the food prep follow the best hygiene practices. With the health scare around Covid-19, the hygiene parameter will play a major role for consumers when deciding to order out or dine out. Social Distancing norms may reduce the number of walk ins into restaurants, with pubs and clubs being the worst affected. Major clubs, pubs would be looking towards alcohol delivery and food delivery through aggregators. Premium and high scale Hotels such as Taj, ITC would recover faster than small scale budget restaurants. Premium restaurants would also be looking at Food delivery in order to effectively utilize their operational facilities. Live Videos, Temperature Logs, Contactless Delivery, focus on health & hygiene will result in increased transparency in turn boosting customer confidence.

Industry experts have revealed that the business volumes and revenues will suffer due to the health scare. However, they believe that the businesses will take time to revive and we can expect the industry to fall back to normal only by the first half of 2021. Till then the only way to deal with the anticipated decline in the business is to maintain hygiene at each level and intimate the consumers for every small or big step take to ensure their safety. Despite the anticipated set back, the online food delivery market of India is expected to grow with a CAGR of 27.4% through the future period of 2019-2025F.

Key Segments Covered:-

By Type of Kitchen

Private

Cloud Kitchens

By Region

Bengaluru

Delhi NCR

Hyderabad

Mumbai

Chennai

Pune

Kolkata

By Markets

Core Markets

Emerging Markets

Rest of India

By Mode of Payment

COD

Credit/Debit Card

Payment Wallets

Net Banking

By Type of Food

Fast Food

North Indian

South Indian

Street Food

Others

By Age

18-24 Years

25-34 Years

35-44 Years

45-54 Years

By Gender

Male

Female

By Share of Meals

Dinner

Lunch

Breakfast

Others

By Mode of Ordering

Mobile

Website

Companies Covered:-

Zomato

Swiggy

Rebel Foods

Biryani by Kilo

Box8

Eat.Fit

Fresh Menu

Key Target Audience:-

Online Food Delivery Companies

E-commerce Companies

Cloud Kitchen Companies

Private Venture Capital Firms

3rd Party Logistic Companies

Time Period Captured in the Report:-

Historical Period: FY’2015–FY’2020

Forecast Period: FY’2021-FY’2025

Key Topics Covered in the Report:-

Pain Points of the Companies

Present Day Pain Points of the Operators

Target Addressable Audience

Operating Models in the Industry

Addressable Gaps in the Market

Types of Users

Impact of Covid-19 on the Industry

Cloud Kitchen Investment Model

Revenue Models in the Market

Analyst Recommendations

For More Information on the research report, refer to below link:-

India Online Food Delivery Market

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