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Digital Food Delivery Apps Revolutionizing Food Products Marketing in India

Article  in  International Journal of Recent Technology and Engineering · September 2019

DOI: 10.35940/ijrte.B1126.0782S619

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 International Journal of Recent Technology and Engineering (IJRTE)
ISSN: 2277-3878, Volume-8 Issue-2S6, July 2019

Digital Food Delivery Apps Revolutionizing

Food Products Marketing in India
N. Thamaraiselvan, G. R. Jayadevan, K. S. Chandrasekar

 as the major cost drivers for the food industry. Despite

Abstract: Food delivery aided through digital apps has emerged escalating traveling and vehicle maintenance costs, these food
as one of the fast-growing developments in the e-commerce space. delivery companies make profits by up to 30% (Mckinsey,
The advent of digital tools has bestowed a different outlook on the
2016).
food industry. Consumers today have the privilege to choose from
a variety of cuisines, anywhere, anytime from a range of food Indian consumers habituated to online shopping experience
providers listed in the e-commerce space. Added attractions like through digital apps and e-commerce websites with maximum
no minimum order value and the multitude of payment options convenience and transparency would expect the same when it
like net banking, digital wallets, and cash on delivery all have comes to the matter of online food ordering as well (Kapoor
increased the consumer convenience. Shrinking urban-rural and Vij, 2018). Just next to grocery items, food delivery
divide with easy access to smartphones has hastened the growth
and acceptance of online food delivery systems. Companies have
proved to be a big opportunity for Indian e-commerce
remodelled their business strategies on a modern day digital companies. Online food delivery market in India, comprising
platform to keep pace with the customer’s changing needs and of aggregators and internet kitchens, showed a spectacular
preferences. In this paper, we particularly examine the growth growth in recent years. The market in India is of the tune of 15
and relevance of digital apps in the food delivery systems run by billion USD and is all set for an exponential growth phase
the food providers particularly fast food companies in India and a
(Kanteti, 2018). The sector is very competitive, and growth of
few strategies which could be adopted by them for sustainable
business in the days to come. online food ordering via digital platform made the
businessmen and entrepreneurs awake and took notice. Some
popular ‘food aggregators’ like Zomato, Swiggy, Food Panda,
Keywords: Digital Apps, e-Commerce, Food Products
Marketing, Consumer Choice and UberEats are feeding the Indian cities online and making
decent profits. Various food delivery web portals and mobile
I. INTRODUCTION apps offer the rational Indian customer a direct comparison
between the prices and rating of different food outlets and
The business of delivering ready to eat foodstuffs from restaurants serving the same dishes and to choose among the
various options (Gera et al., 2018).
restaurants to home is undergoing a sea change as new online
platforms enable food providers to capture markets and II. METHODOLOGY
customers day by day. Worldwide, the food delivery market
stands at 4 percent of food items sold through restaurants This paper is purely analytical based on the available
chains and fast-food outlets. This market has already matured secondary data. Existing literature was thoroughly analyzed
in many countries with a growth rate estimated at 3.5 percent to explain the trends and patterns in the ‘Digital Food
for five years down the line (McKinsey, 2016). The picture is delivery’ market in India. Secondary data was explored to
not so different in our country as well. The conventional mode identify and explain various variables that drive the
of food delivery wherein customers order food online through acceptability of ‘food aggregators’ in Indian food marketing
the websites of restaurants, or fast-food chains have now been scenario, the newer trends, and future market. The secondary
replaced with the concept of ‘aggregator business model.’ data sources used were sales reports available from the
Here the business player provides a ‘single window system’ official websites of various companies, published documents,
enabling the customers to order food online from a wide survey reports, reports released by Government agencies and
variety of food providers registered on the portal. The Marketing Research agencies.
‘aggregator’ would charge a fixed margin of the order from
the food provider and in turn, handles the delivery of the food III. DISCUSSION
item at the doorstep of the consumer. The focus has now A. Growth Drivers
shifted from technology to logistics, which is currently acting India, with population of over 1.3 billion, is undoubtedly a
big consumer market across the globe. We have more than
Revised Manuscript Received on July 22, 2019. 50% of our population below the age of 25 and more than
N. Thamaraiselvan*, Department of Management Studies, National
Institute of Technology, Tiruchirappalli, Tamil Nadu, India. Email: 65% below the age of 35 years. It is estimated that, in 2020,
[email protected] the average age of an Indian will be 29 years, compared to 37
G. R. Jayadevan, Department of Management Studies, National for China and 48 for Japan which would make India, a nation
Institute of Technology, Tiruchirappalli, Tamil Nadu, India. Email:
[email protected] with the youngest population in the world too.
K. S. Chandrasekar, Institute of Management in Kerala, University of
Kerala, Thiruvananthapuram, Kerala, India. Email: [email protected]

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DOI:10.35940/ijrte.B1126.0782S619 662 & Sciences Publication
 Digital Food Delivery Apps Revolutionizing Food Products Marketing in India

Youth populations below 40 years demand more fast food digital business. Moreover, with this format, comparatively
items in their diet (Kharas, 2017). Young Indian appetite more number of customers can be serviced, than the
would be one of the major growth drivers for food and conventional ‘sit-and-dine’ format where at busy hours; lot of
beverage sector on the whole. customers may be missed. The door delivery format would
also keep customer loyalty robust.
Indian youth productively employed in high-earning fields C. Technology is the Power
like IT/ITES, banking and financial services, tourism, and
hospitality have scaled up their standard of living and made Many players are entering the Indian food business sector
their wallets heftier. A recent study conducted by the World consequent to the growing usage of internet and smart phones
Bank revealed a remarkable 50% hike in per capita income in among customers. As a general rule, the success of any
India during the period from 2006 to 2016. Urban-rural divide business lies in certain vital factors. To perform a precise
is shrinking in the country. Almost all cities in India witness a market study, the choice of updated technology and the future
visible change in the social setting, which further propelled vision of the company are most relevant. The choice of
the mushrooming of fast food outlets across the length and updated technology has proven its role by boosting the market
share, building competitive advantage, and improving profit
breadth of the country.
margins for the company. In the present digital era with
mammoth size data available, Information and
Lifestyle changes mainly in Urban India with
Communication Technology can be utilized as an effective
double-income earners in families, crunch on quality time for tool to gain competitive edge over other players in the market.
spending with family members, changing food habits all have A company can obtain valuable insights by analyzing the data
resulted in growing demand for speedy access to food items and take more appropriate decisions. The food aggregators
especially cooked food stuffs at affordable rates. More need to quickly realize the challenges associated with the
women became earning members in their families, with the adoption of technology and work towards solving such issues.
result that they spend most of their productive hours for They need to create a platform that provides an ‘user engaging
commuting and at work. There will be less time at their experience’ which ultimately increases customer satisfaction
disposal to cook full blown meals at home, all by themselves. levels and loyalty.
In such situations, employed women generally spend a large
portion of their disposable income on buying take outs or D. New Trends
eating out. Smartphone literacy has increased over the past few years,
with cheaper access to the internet. The growing relevance of
Nowadays, more and more restaurants and food outlets mobile-based food delivery apps and website-based food
offer global cuisines. More Indians, particularly those ordering platform cannot be ignored at this juncture. Well
dwelling in urban centers, tryout new cuisines, with the result known brands like Domino’s Pizza delivers over 50,000
that the number of times they dine out increase, thus positively pizzas in a day and 15,000 of those orders are placed through
influencing the overall Indian food industry. There exists a the digital mode. Fassos, another popular food chain caters to
over 60,000 orders in a day all through their in-house mobile
symbiotic association between the growth of retailing and the
app. In the recent time, these big players have joined hands
proliferation of international food brands and restaurant
with online food service site Food Panda with the result that
chains in the country. The food providers identified retail
the number of food orders would double in the years to come.
malls to be ambient for getting more customers who visit With the success of E-Tailing, all delivery-based ‘quick
malls for shopping. On the other side, more customers dining service restaurants’ (QSR) would have better prospects for
at food outlets obviously perform shopping at the shops in earning more than the revenues generated from their
retail malls too. Hence a ‘synergy’ is developed between the conventional business models.
parties.
E. Challenges in Operational Efficiency
Door delivery focused food business demands lesser initial To derive the best possible operational efficiency would be
investment when compared to opening up a restaurant be it for the greatest challenge of any food aggregator in India. Indian
the matter of rent, interior designing, or cost of furniture. Such business is considered to be of comparatively lower margin
cost benefits lure more and more operators to dedicate their portfolio for majority of the food companies. Many players
time, money, and energy in these food business options. The operate with poor profits thus posing severe hurdles for their
operators can enjoy considerable cost cuts in terms of labor, mere sustenance in the market. It becomes extremely difficult
supplies, and the need for aesthetic store locations, which is for any company to charge a decent sum of money from the
the costliest of all investments in restaurant business. consumers to make it operationally sustainable. Use of low
cost technologies and strategies to operate, innovate and
B. Experimenting with the Business Portfolio create value for the end-user is the need of the hour. To cite an
The fast-food joints and restaurant chains keep on offering example, Zomato, one of the leading food aggregators in
more door delivery services with an aim to maximize their India, started offering varied products and services to
business output. They target on rationalizing the existing generate more revenue. Products like Zomato Base, Zomato
fixed costs and also keeping their business sustainable. The Book, and Zomato White label,
food business operators have identified home delivery to be along with business
an essential ingredient in their product mix. Food outlets consultancy services have made
whether big or small; all are striving to get a share in the

Published By:
Retrieval Number:B11260782S619/2019©BEIESP Blue Eyes Intelligence Engineering
DOI:10.35940/ijrte.B1126.0782S619 663 & Sciences Publication
 International Journal of Recent Technology and Engineering (IJRTE)
ISSN: 2277-3878, Volume-8 Issue-2S6, July 2019

the revenue model more sustainable (Chadda, 2012). unexplored one among these is the Home cooked food model
(Kanteti, 2018). Thus innovation can spin off the restaurant
F. Skeptical Business business in a wholly new direction. Technology and
The Food Safety and Standards Authority of India (FSSAI), innovation will now dictate the growth of this sector.
the food safety regulator in India recently cautioned the ‘food Technology is the potential tool to offer high cost and
aggregators’ for placing unverified food outlets on their efficiency improvements for food providers as well as
digital platforms. The authority directed them to ensure customer ecstasy at the other end.
proper training and capacity building of restaurant partners in
the business to improve food safety and hygiene instead REFERENCES
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restaurant businesses without own delivery-focused formats
and it is only a matter of time and some significant global AUTHORS PROFILE
investments.
Dr. N. Thamaraiselvan, MBA, MPhil,
PhD is the Professor (Marketing) at the
V. CONCLUSION Department of Management Studies,
National Institute of Technology,
Rapid urbanization connected with the influx of Tiruchirappalli, Tamil Nadu, India.
professionals in urban centers and exposure to western With over 25 years of academic and
lifestyle is aiding the spectacular growth of food delivery and industrial experience, he proved to be a
restaurant segment in India. Adding to this scenario is the passionate academician with incessant
drive to contribute the best to
increase in usage of smartphones and food delivery apps. educational community by discovering innovative pedagogical techniques
These have become a big hit in the food industry with a in the teaching learning process. He served the positions of Associate Dean
growing number of tech-savvy customers using food delivery (Administration) and Head, Department of Management Studies of the
National Institute of Technology, Tiruchirappalli. His active commitment to
apps at the comfort of their homes and offices. Present day research made him to publish more than 40 articles in referred journals and
food tech space offer many business models. To name a few, present research papers in several national and international conferences.
are on-demand delivery, cloud-kitchen, thin layer, full stack,
restaurant and food discovery, concierge, market place, and
home cooked food models. Most valued, the toughest and

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DOI:10.35940/ijrte.B1126.0782S619 664 & Sciences Publication
 Digital Food Delivery Apps Revolutionizing Food Products Marketing in India

G. R. Jayadevan, B.Tech (Dairy Technology),

MBA, PGDM, PGD-PRM, UGC-NET is an
Assistant Professor in the Department of Dairy
Business Management, Faculty of Dairy
Science, Kerala Veterinary and Animal Sciences
University, Wayanad, Kerala. He is currently
pursuing Doctoral Programme in Management
Studies (on Study Leave) at the National
Institute of Technology, Tiruchirappalli, Tamil
Nadu, India. With 12 years of teaching and administrative experience, he
published 11 research articles and several popular articles in reputed journals
and magazines.

Dr. K. S. Chandrasekar, B. Pharm (Hons.),

MBA, MS, CPET, PGDHP, PhD, Post-Doctoral
Degree (Commonwealth Open University,
Spain) is the Professor, Institute of Management
in Kerala, University of Kerala and Formerly,
Dean of Faculty of Management studies and
Chairman- Board of Studies in Business
h Management of the University of Kerala. He is
oto presently the Vice Chairman, Centre for
Management Development, Trivandrum (A Government of Kerala
institution). With 22 years of teaching MBA, M.Phil. Programmes at
Alagappa University and University of Kerala specializing in Marketing,
Strategic Management and HRM, he could author seven books in
Management area, published 161 research articles and presented 179
research papers in several national and international conferences.

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Retrieval Number:B11260782S619/2019©BEIESP Blue Eyes Intelligence Engineering
DOI:10.35940/ijrte.B1126.0782S619
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