Recently, a picture of a huge queue of food delivery persons outside a popular Hyderabadi restaurant caught the fancy of social media. Bawarchi at RTC X Road was the restaurant in the picture, but you can see similar scenes at quite a few popular restaurants in the city. The boom in food delivery has definitely brought a strong source of revenue for restaurants in the city, and also a paradigm shift in the business model. The many app-driven delivery providers have come in with models that seem to be a win-win situation for both the provider and the consumer.
The growth in this segment worldwide has been phenomenal, and it is said that a new concept is catching up abroad of just having a pantry instead of a kitchen in your house and totally relying on ordered food, in the same way as some people do not buy a car and rely on cabs for their daily commute. For food outlets which derive significant revenue from food delivery, investing in sustainable packaging where the food stays fresh has become an important aspect of the business.
Hyderabad has really jumped on to this delivery revolution. The food delivery market in Hyderabad is dominated by two major players Swiggy and Zomato, with Foodpanda and UberEats being smaller players. It is interesting to note how the restaurants feel about these app-based service providers. While many of them are happy that enrolling on the platforms have given a much-needed boost of 20% and more to their business, a few complain about the high commission some of them charge. The present exclusive partnerships promoted by these food delivery apps also bring in benefits as they lower the commission paid by the restaurants, leading to more moolah for these.
In fact, many diners now eat out only on special occasions preferring instead to order in and enjoy the food at their homes. However, Pallab De, a keen watcher of Hyderabad food and beverages scene feels that the extreme interest of the diners in ordering food through the delivery apps may be a temporary phenomenon. As per him, this boom is driven more by the huge discounts that the delivery providers offer by burning cash as part of their promotions, and over a period of time when this gets normalised, the volume will actually drop to a more sedate level. It is true that most of the food delivery apps still make a loss per delivery, with Zomato pegging it at `25 per order for last year.
Another aspect of the surge in delivery services is the emergence of cloud kitchens or virtual restaurants. These are places which serve food only through delivery services and do not have a dine-in outlet of their own. Rebel Foods with its brands like Ovenstory and Behrouz Biryani is a leading player in this segment operating its own delivery fleet. Many small entrepreneurs in Hyderabad are jumping on to the bandwagon by setting up small kitchens with a delivery-only model and substantially lesser investments. The success of some of them has also drawn in biggies like Swiggy, who are having their own virtual restaurants with labels like Bowl Company and Homely to cater to this segment.
Apart from the general food segment, there are apps like Tinmen who cater to the daily requirements of meals. Sourcing food from a large number of home chefs, Tinmen delivers your lunch and dinner every day at your doorstep, and you have the option of choosing a variety of food on different days of the week. Leanspoon, Greens and More, and Eat.fit concentrate on the health food segment offering personalised healthy meals often bolstered by health advice. Many more fresh ideas are coming up in this segment which makes the future of the delivery business look vibrant and interesting.