{"id":3721,"date":"2016-02-24T11:14:07","date_gmt":"2016-02-24T11:14:07","guid":{"rendered":"https:\/\/ezrankings.org\/blog\/?p=3721"},"modified":"2020-10-30T08:07:07","modified_gmt":"2020-10-30T08:07:07","slug":"india-food-delivery-startups-the-bubble-burst-saga","status":"publish","type":"post","link":"https:\/\/www.ezrankings.com\/blog\/india-food-delivery-startups-the-bubble-burst-saga\/","title":{"rendered":"India Food Delivery Startups: The Bubble Burst Saga"},"content":{"rendered":"<p align=\"justify\">With the constantly changing lifestyle of individuals, there has been an upsurge in the demand for food delivery startups. From groceries to freshly cooked meals, these startups cater to every single need of individuals. According to the market reports received even a few months back, these food-technology startups happened to be the hot favorites of potential investors.<\/p>\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_69 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title \" >Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.ezrankings.com\/blog\/india-food-delivery-startups-the-bubble-burst-saga\/#Reasons_for_the_Downfall\" title=\"Reasons for the Downfall\">Reasons for the Downfall<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.ezrankings.com\/blog\/india-food-delivery-startups-the-bubble-burst-saga\/#The_Statistical_Lowdown\" title=\"The Statistical Lowdown\">The Statistical Lowdown<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.ezrankings.com\/blog\/india-food-delivery-startups-the-bubble-burst-saga\/#Understanding_the_Business_Models\" title=\"Understanding the Business Models\">Understanding the Business Models<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.ezrankings.com\/blog\/india-food-delivery-startups-the-bubble-burst-saga\/#The_Stark_Reality\" title=\"The Stark Reality\">The Stark Reality<\/a><\/li><\/ul><\/nav><\/div>\n<h3><span class=\"ez-toc-section\" id=\"Reasons_for_the_Downfall\"><\/span>Reasons for the Downfall<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p align=\"justify\">Although they attracted huge amounts of funding, they spent those amounts on advertising and marketing, in an effort to grab the majority of market share. Perhaps, that is what resulted in doomsday for them. Look around and you will get a hang of the reality. Today, numerous food-delivery startups are shutting down at a rapid pace.<\/p>\n<p align=\"justify\">Failure to meet investor demands and a colossal financial pressure are some of the crucial reasons for their downfall. As the most unfortunate consequence, most of these food delivery startups are either closing down or reducing their employees.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"The_Statistical_Lowdown\"><\/span>The Statistical Lowdown<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p align=\"justify\">With this brief overview of the debacle, let has had a quick look at the food delivery business model. Going by the reports published by India Brand Equity Foundation, the online food ordering and delivery ventures account for about Rs 5,000 to 6,000 crore. And the revenues grow by a whopping 30% per month. The various personnel, as well as business platforms involved in this process, are food-ordering platforms, aggregators, delivery-exclusive payers, cloud kitchens and proprietary meal makers.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Understanding_the_Business_Models\"><\/span>Understanding the Business Models<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p align=\"justify\">While classifying startups under the food delivery business model, you will come across three major segments.<\/p>\n<p align=\"justify\">The first group consists of startups such as TinyOwl, which happens to be a virtual marketplace acting as trading points for restaurants. The next set comprises of hyper-local delivery services such as Swiggy and Foodpanda, which takes care of both logistics and traffic.<\/p>\n<p align=\"justify\">The third group in this list includes full-fledged food businesses like Brekkle and Food Vista.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"The_Stark_Reality\"><\/span>The Stark Reality<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p align=\"justify\">Each of these segments has their fair share of hassles. In the case of virtual food marketplaces such as TinyOwl, the average transaction size happens to be quite small. Quite inevitably, the commission received on orders is extremely less. These startups fail to gather revenues and in some cases, even the cost of customer acquisition is not met.<\/p>\n<p align=\"justify\">On the other end, the average commission percentages for hyper-local food delivery enterprises range from a mere 5% to 15%, depending upon the location of the order. Additionally, the absence of uniform ordering patterns further results in low productivity and revenues.<\/p>\n<p>\u2018We are closed\u2019<\/p>\n<p align=\"justify\">As the cumulative effect of all these factors, the past 6 to 12 months have witnessed a major downfall in the food delivery businesses. The startup bubble in this nation began to burst with Langhar, a Delhi-based food delivery service closing down during February.<\/p>\n<p align=\"justify\">OrderSnack, a promising Chennai startup joined this league by shutting down even before raising capital investments. SpoonJoy and Dazo, both with their origin in Bangalore shut down recently, during the last quarter of 2015. With such frequent call-offs by promising debutantes in the food delivery business, the entire ecosystem is going through tough times. Entrepreneurs need to think big and prepare to grab the market as service creators and not providers. Let\u2019s hope that happens before the startup bubble in India completely explodes!<\/p>\n","protected":false},"excerpt":{"rendered":"<p>With the constantly changing lifestyle of individuals, there has been an upsurge in the demand for food delivery startups. From groceries to freshly cooked meals, these startups cater to every single need of individuals. According to the market reports received even a few months back, these food-technology startups happened to be the hot favorites of [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":10251,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[18],"tags":[],"class_list":["post-3721","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v23.4 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>India Food Delivery Startups: The Bubble Burst Saga<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"India Food Delivery Startups: The Bubble Burst Saga\" \/>\n<meta property=\"og:description\" content=\"With the constantly changing lifestyle of individuals, there has been an upsurge in the demand for food delivery startups. 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