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56% of Daily Online Food Orders Are Fulfilled by Self-Delivery

January 31, 2018

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New research from RedSeer Consulting finds that the food-tech industry is growing at a 15% quarter on quarter rate and the players are moving towards self-fleet to have a better overall control of the consumer experience.

Image: RedSeer

The food-tech industry witnessed more than 15% increase in daily orders quarter-on-quarter. With such a steady growth we saw the food-tech players take control of the delivery process but fulfilling more and more orders through self-fleet. This resulted in an improvement in the average delivery time of the industry positively impacting the consumer experience.

Key Messages

The food-tech industry witnessed more than 15% growth Q-o-Q
Chennai joined the list of top cities (having more than 10,000 orders per day)
The percentage of daily orders fulfilled by self-fleet increased from 46% in Q4CY’16 to 56% in Q3CY’17
The average delivery time of the industry improved from 47 mins in Q4CY’16 to 42 mins in Q3CY’17

The year 2017 has been a great success for the online food delivery players. The industry saw more than 15% increase in the number of daily orders quarter-on-quarter. Chennai joined the list of top cities (Bangalore, Delhi, Mumbai, Pune, Kolkata and Hyderabad) making it a total of top seven cities which together contribute to nearly 87% of the overall market.

With such a steady growth we saw the industry move towards having a higher control on the overall delivery process. The food-tech industry with the increase in per day orders has become more of a logistics play and hence we saw the industry shift towards the self-fleet model to have a better control in the overall delivery process.

The industry witnessed an increase in self-delivery from 46% in Q4CY’16 to 56% in Q3CY’17. With Swiggy having almost 100% self-fleet, Zomato acquiring Runner and Foodpanda having more than 50% of their deliveries through self-fleet.

This move resulted in a fall in the overall delivery time of the industry from 47 mins in Q4CY’16 to nearly 42 mins in Q3CY’17. This has altogether increased the reliability on timely delivery. The shift was well received by the stakeholders of the industry as it brought an increase in the overall stakeholder experience relying majorly on the delivery time satisfaction.

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Commenting on the findings of the research, Anil Kumar, Founder and CEO, RedSeer Consulting said, “It is becoming increasingly clear that food tech is more and more of a logistics play, restaurant discovery is not a deep competitive advantage. There are clear trends on customer and seller satisfaction supported by the better delivery speed and compliance that vouch for superiority of the captive delivery model in Indian market.”