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Tag: FoodDelivery

  • Is Cloud Kitchen Future of Restaurant Industry? | Popularity of Cloud Kitchen in India

    Ever since Covid-19 arrived, everything has digitised. With that, the shift towards a delivery-only model has accelerated. The Cloud Kitchen market got benefitted from this. Every small and large scale restaurant have also started their online food delivering services. And this is the major reason for the growing popularity of cloud kitchens. Not only that, it has become the latest trendsetters in the restaurant industry.

    Let’s have a look if cloud kitchen is really going to be the future of the restaurant industry or not. Here are few things that this article will cover:

    What Is Cloud Kitchen?
    Top Cloud Kitchens In India
    How Cloud Kitchen Works?
    The Future Of Cloud Kitchen In India

    What Is Cloud Kitchen?

    Cloud Kitchen is a kitchen space with no physical outlet and dining facilities.
    Cloud Kitchen/Virtual Kitchen/Take Away Restaurant is a kitchen space with no physical outlet and dining facilities.

    A cloud kitchen is a virtual kitchen or ghost kitchen with no physical outlet and dine-in option. In other words, it is a mobile application that accepts only online delivery demand via apps or calls or online food aggregators.

    While the concept was popular even before the pandemic struck, cloud kitchens have become more lucrative now. Cloud kitchens witnessed a huge surge in their demand during the pandemic as well. People got stuck in their homes and missed their favourites food. Gladly, those cravings got saved by online food delivery platforms like Zomato, Swiggy, Uber and more.

    And these cloud kitchens have their presence on these online food delivery platforms via which customer can order their delivery.

    Top Cloud Kitchens In India

    Faasos

    Faasos is one of the biggest cloud kitchen restaurant companies in India. It delivers in more than 15 states in India. It has an add-on feature which is to deliver the order free if the food is not delivered within 30 minutes. This is to keep the customers satisfied.

    All About Faasos Business Model – The Biggest Cloud Kitchen

    Box8

    Currently, Box8 is one of the fastest-growing food delivery apps in Delhi, India. They define their selling agenda by keeping the taste desi. From paratha to lasagnas, desserts to chicken tandoori, you can have it all on Box8.

    Travelkhana

    Travelkhana is a company that provides fresh food for Indian railway passengers. Many items can be delivered right to your seat. TravelKhana has now grown to have 1,200 vendors on its site.

    Oven Story

    Oven Story is cloud kitchen famous for providing different types of pizza to their customers. Oven Story falls under Rebel foods, which is online restaurants company. It deals with over 11 cloud kitchen in India, one of them is Oven Story.

    Biryani By Kilo

    Biryani By Kilo is perfect for those Biryani lovers, who cant think about their life without the lip-smacking dish. It is a cloud kitchen, where one can order Biryani and Kebabs and the best thing is the Biryani are delivered to your doorstep in earthen bowl.

    Behrouz Biryani

    The recipe of Behrouz Biryani is 2000 years old and itcame from the kingdom of Behrouz which is in Persia. This cloud kitchen is famous for all types of Biryani especially Murg Tikka Biryani and Dum Gosht Biryani and serving the customers with love.

    How Cloud Kitchen Works?

    Cloud Kitchen follows the delivery-only business model. they take orders from their own website or rely on other food delivery apps, through which they get orders. As they are delivery only restaurants therefore there is no need to build a proper dining place for their customers.

    Restaurant interiors, rent and extra staff costs are not needed here and the restaurant’s digital presence is enough to gather customers for the cloud kitchen. Cloud kitchen only needs proper infrastructure of the kitchen, chefs to make good food and of course the delivery people.

    Food-Tech Startups In India | Best Indian Food-Tech Startups [2021]]
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    StartupTalkyAshwini

    The Future Of Cloud Kitchen In India

    With the arrival of online food delivery platforms like Swiggy and Zomato, the demand for online food delivery has increased. According to DataLabs by Inc42, the food ordering market of India is expanding at a CAGR of 16% to reach $17 billion by 2023. The projected market size of cloud kitchens is expected to reach $1.05 billion by 2023.

    With the digital shift of all the services, people have started preferring online platforms. So is the case with food. They have no free time to walk down to a restaurant or drive-in jam-packed traffic for food. And this problem has been beautifully solved by the food delivery service providers.

    In the coming future, Cloud kitchen will transform the way we dine. The reason for its growth is that the amount of risks is comparatively lower. The monetary constraints can easily be dealt with as the demand for the digital platform lowers the operational cost.

    Conclusion

    The conventional method of dining is always going to remain there but Cloud Kitchen will be the first preference of the consumer as they prefer to order online rather than visit a restaurant. The reason for this inclination is comfort eating because of the convenience and mobility of consumers.

    FAQs

    What is a cloud kitchen?

    A cloud kitchen is a virtual kitchen or ghost kitchen with no physical outlet and dine-in option. In other words, it is a mobile application that accepts only online delivery demand via apps or calls or online food aggregators.

    Are cloud kitchens profitable?

    Cloud kitchen can reach customers throughout the city without using large premises, it can be more profitable than a restaurant. Cloud kitchens are likely to become profitable faster than restaurants due to their low cost and broad reach.

    Can I start a cloud kitchen from home?

    Yes, you just need to have a base kitchen for the preparation of delivery-only meals. You can collaborate with online food ordering and delivery platforms like Zomato and Swiggy to deliver your meals to the customer.

    Cloud kitchens are popular because of the rise in online food delivery services.

    What is the future of cloud kitchen?

    Cloud Kitchen is not only the future but it has become the latest trend now. The cloud kitchen market is going to expand at a higher rate in the future with the surge in the demand for online food delivery services.

  • The Unpredictable Acquisition of Online Food Delivery

    “Some battles are better left with honour rather than victory.”

    21st January 2020, saw a sweeping acquisition which can deftly be called megalithic. Uber Technologies Inc.’s made the decision to retreat from its food delivery business in India, UberEats. Zomato, the online food delivery and restaurant aggregator platform, announced that it has acquired UberEats’ business in India in an all-stock deal giving 9.99% shareholding. The exit from the business can result in annual savings of nearly $750 million for UberEats, numbers from a regulatory filing last year suggests.

    The deal had been in progress since months, with wide conjecture over Uber’s decision to completely exit food delivery business in India as a resort from the piling pressures on the ride-hailing company to curb losses especially after it went public in 2018. The move, said a source, vibes with Uber’s philosophy to either lead the business or to leave the business.

    India’s Food Delivery Industry
    Uber Eats in India
    Why the acquisition was inevitable?
    What does Zomato Gain?
    Conclusion

    India’s Food Delivery Industry

    Since PizzaHut initiated the first-ever pizza online order back in 1994, online food delivery has become a billion-dollar business. The Indian food delivery industry has exhibited robust growth.

    Revenue in the Online Food Delivery sector amounts to US$9.2 Billion in 2020. The market’s largest share is Restaurant-to-Consumer Delivery with a market volume of US$4.9 Billion in 2020. India’s online food delivery market is projected to touch $12.53 Billion (CAGR 2020-2024) on the back of high growth rate, according to a recent report by DataLabs by Inc42.

    Compared to the global growth rate of 9.01%, the online food delivery market in the country is growing at 15%, the report said. 56% of all startups accounts for the food startups who have raised $5.24 billion between 2014 and 2019. Food-tech startups contributed 42% of the total consumer services deal count between 2014 and 2018.

    Swiggy so far gained up close to $1.5 Billion of funding, Zomato raised close to $800 Million funding. The cloud kitchen market owns the potential to reach $1.05 Billion by 2023. There have been many reasons which propelled India’s shift to the online delivery system. Impale of internet and smartphones have further provided the environment for growth.

    The growing role of Indian women in the workforce has also increased the preference for prepared meals and a large young population expands the customer base.

    The pioneers in the Indian online food delivery market are Swiggy, Uber Eats and Zomato, which claims to deliver in 500 cities across the country. Innovative marketing campaigns have also conferred the popularity and set a new trend.

    Also Read: List of prominent and successful startups in Delhi

    Uber Eats in India

    Uber stepped into the Indian food delivery scenario in May, 2017.

    India, of course, was a huge global opportunity making Uber even more committed to it than the Chinese market. With a growing population of 450 million – 465 million people by June 2017, Uber took the opportunity to connect people, be it to taxis, cars, food and more.

    The platform experienced nearly 50% month-on-month growth, in its first year of operations.

    But the competition took all its zeal away, UberEats never managed to attract many restaurants or customers in India, despite the company’s ride-hailing. The business dragged down by 2019 with the average net revenue dropping by 0.4% according to the CFO Nelson Chai.

    Going by the company’s statement Uber’s total revenue grew nearly 30% to $3.81 billion, while net loss went to $1.16 billion in the quarter ended September 30.

    According to regulatory disclosures , UberEats projected a negative revenue of 762.5 crore for the five months ending December 2019. Uber hoped that the business in India will be profitable by 2026, according to a valuation report prepared by KPMG affiliate BSR but looks like the hopes turned to dust.

    Uber projected higher operating losses of 2,197 crore in UberEats for the five month period – August to December 2019.

    In the last quarter earnings call, Uber chief executive Dara Khosrowshahi said the food delivery market in India is competitive, and admitted to being the number three player in the space. Yet, there is no clear market leader in the space.

    According to The Economic Times, Uber had halved its annual cash allocation to its food-delivery business in India to $90-$120 million.

    Also Read: 21 Restaurant Marketing Strategy

    Why the acquisition was inevitable?

    The stiff competition faced by UberEats, compelled it to take the back foot  despite the growth and expansion.The two food delivery giants control about 80% of the food delivery market.

    Although Uber seems to be at the weak end here , the deal might prove to be an advantage. The multinational will now be able to cut losses and as part of the deal, acquire stakes in a start-up that was valued at $3.55 billion this month.

    Zomato said they will now be able to add 10 million monthly food orders to their existing 40 million, they expect to surmount Swiggy.

    According to a report by New York Times, for the first three quarters of 2019, Uber Eats in India amounted for 3% of the gross booking for Eats globally and at least 25% of its adjusted operating losses.

    The venture also had a setback when co-founder and former CEO Travis Kalanick resigned from its board of directors in December last year. Kalanick, who helped found Uber in 2009, stepped down from the company’s helm in June 2017 under pressure from investors after a string of setbacks.

    On the other side, the deal seals days after Zomato had raised $150 million in funding from existing investor Ant Financial, an Alibaba affiliate, at a $3 billion valuation.

    Also Read:  List of the Best Food Startups in the Country

    What does Zomato Gain?

    The Uber deal helps Zomato in multiple ways.

    It helps in terms of harmony regarding customers, regarding the restaurant supply chain and also very importantly, UberEats had a stronger network in small towns and in the southern region. This will significantly influence Zomato’s customer reach, it will also get about 70,000 active delivery partners existing on the Uber Eats network.

    It will raise the combined market share to 52% as opposed to Swiggy’s 43%. Though there’s a looming fear of Amazon’s breakthrough in the food industry, Zomato can enjoy a new zenith if it plays the right cards.

    Although, the competition would now be cut-throat between the two pioneers, there might be some tremors for the customers. The companies will now focus on lower discounts and more profits.

    Conclusion

    As Zomato quoted in its statement, “The obstacles of your past can become the gateways to new beginnings”, the further developments would be interesting to observe.

    Zomato has expanded to 550+ cities over the last year, with a commitment to operating excellence. The competition in this space is going to continue to be intense, and Swiggy might already be working on a foolproof plan.