In an report published by RedSeer research firms, which says “Indian online grocery (food delivery) markets – including Internet kitchens, has flourished by 150% in 2016 with a GMV estimated at $300 million, although the weak investors sentiment and key players scaling down operations or closing the shops.”
The reports also states that “During this time period Indian online grocery market has experienced many obstacles in its history of growth while multiple players reducing their operations or shutting their shops. This is also visible in the sentiment of the poor investors interest where the market saw total saw total round of funding less than $80million in 2016 as compared to $500 million in the same period last year.”
“The online platforms have mainly helped the restaurants which help them to increase their reach and this business sources has improved their use of resources. In addition, customers have also started opting for multiple choices which are offered by online platforms instead of ordering the food by calling the individual restaurants.” reports added.
The reports also claims that “The share percentage of online food distribution for partners restaurants (restaurants associated with online food delivery platforms) has reached by 30-35 percent of their entire business and these figure to be seems grow massively a day-by-day.”
With more than 80 % of total orders from the top five major cities (out of more than 20 cities), established players are now focus on operational efficiency and profitability in these cities and have limited their expansion into it’s new markets.
Founder and CEO of RedSeer Consulting firm added “With the customers and restaurants that adopts these online food delivery services, order sales showed a healthy growth, but the fundamental questions of the profitability of the unit and operational efficiency must be taken into account building a sustainable business in this sectors.