India explodes with online orders as eating in is the new normal
FollowVishnu Nair, 24 works with a multinational bank, work pressure ensures that he often finds himself ordering food at the office or if he is late, and tired, even at home. Vishnu Says,” Banking is a demanding profession and time is at a premium for us young professionals. I am not an experimental eater for me it is muglai or if the one for one offer is on - it's Domino’s. On weekends, I do cook the normal chicken and rice.”
He is not alone. According to the latest report by the National restaurant association of India (NRAI) the takeout business is increasing by over 20% per year. The association is the Apex body of about 10,000 restaurant owners in India. The survey included a comprehensive sample of 3500 consumers in 24 cities across India.
The report has some interesting findings, in cities such as Gurgaon and Bangalore with sizable double-income professional couples, ordering food in, is the new going out. The report said that India’s restaurant sector will create direct employment for 5.8 million people in 2016 and it‘s share in the taxes paid to the government would be ₹ 22,400 crore. An increasingly bigger slice of this is food ordered for delivery.
The average takeout order in India is about 1.5 per month per household. Given that at least 40 million households can afford to do this it is a huge market. However, this is a price sensitive market. The report puts the average spend per month per household at about ₹1,500. The key figure is the growth rate for takeouts - which at 20% is at a tear-away pace.
Put differently, every passing month, more people are ordering food in than ever before. Interestingly 22% of those surveyed used the mobile to order food. This is also because last mile services like Food Panda are slowly gaining acceptance. As India adds smartphone consumers and with 4G on the way, expect this figure to explode.
The survey research point put speed of delivery as the single most important factor in repeat orders placed by dining in patrons. And while Indian food leads the preference, it is followed by Chinese fast food - Pizzas hogging 22% of the pie is fast catching up in a country with more than a thousand dining options at any given moment.
The pizza business has a caveat; it is heavily dependent on very generous discounting. On non-scheme days it does not do half as well. For standalone restaurants, the old rule of a good location still matters. Yet when ordering in - it is location neutral.
This is the domain of discounts, more discounts - and if possible even more discounts! Technology is also important for this business especially logistics players such as those who operate the cold chain and software that allows for order tracking.
Sameer Kukreja, Hospitality veteran and trustee of NRAI says, “There is a real momentum in the take out business. The work culture is increasingly busy in the metro cities, this makes take out an attractive option at lunch times.
Come weekend the trend is to increasingly order online. Technology and players that provide last mile delivery are gaining traction. Food technology enablers are now very important and restaurants have to increasingly reach out to food delivery platforms online.”
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So next time you see that pizza delivery boy ride like Mad Max on the local road you know the reason why – he is about to complete yet another order from an increasingly mobile, very hungry but value conscious customer.
