The single word resonates deep within every individual in this country. People don’t eat to live, people live to eat here. The way food is named, how long it takes to prepare, how good it looks, smells and is it taste-worthy – all of these make a huge difference in our perception towards a restaurant, towards a chef. For some, Food is like a religion.
The entire startup ecosystem has emerged gloriously over the past ten years in India. And the foodtech startups, or food ecommerce, or whatever you name these, have taken a big chunk of market share.
In Tier-1 cities like Bangalore or Mumbai, people have gone out of convention.About 2,00,000 table bookings are done per day per city on an average. Whether its a table for a family, a candlelight dinner, a party, buffet, or an weekend stay at a resort, people prefer to book it through online third party search and discovery sites. For this, people depend upon reviews or irresistible deals, or other smart features such as nearby places, current parties, etc.
Even funding for the foodtech startups has leaped up in the recent years. There are big examples like Zomato and Foodpanda. There are a lot of smaller companies, like TinyOwl, EveningFlavors, Yumist, and iTIFFIN, which have raised considerable amount in funding. Even Boston Consulting Group reports, the market size of food in India is expected to reach Rs 42 lakh crore by 2020.
So what are the reasons behind this unprecedented mushrooming and funding of foodtech startups?
- We Indians are serious about our meals, and they eat multiple times a day
- We look to take time off after a day’s work and have some fun
- Preference in repeat ordering from a particular restaurant
- Repeat visits to particular clubs/lounges
- Scope for strong brand recall for restaurants
- Low cost of acquisition as compared to retail ecommerce
- Scope for innovation and streamlining in terms of product model
- Rarity of big brands in the space, thus creating big opportunity
There are still major challenges which this new sector faces. One of them isretaining customers beyond 180 days on an average, as quoted by Tapan Kumar Das, CEO of iTIFFIN, which operates out of Bangalore as of now. You not only have to be smart enough to cater to the interests of the customers, but also well differentiated so you have loyal customers. Another problem companies face is theissue of evolving. While other industries see evolving at a later stage of their growth, foodtech startups have to constantly evolve – to stay away and ahead of fierce competition.
Akash Shrivastava, CEO and Founder, EveningFlavors, feels that defining the product model and making it fresh, adaptive and receptive among the end users should be the primary concern of the foodtech entrepreneurs. He aims to craft EveningFlavors into a one-stop platform for real-time ordering or booking in restaurants, lounges and resorts.
The future holds huge potential. Presently many smaller companies are being acquired by larger companies, and there have been visible changes in the product every now and then. Also, with in-depth smartphone and social integration, addition of maps and wallet, and smart features like trending dishes, specialty restaurants or friends’ suggestions; companies are gearing up for a big fight, not only in the logistics level, but also in the product space.
Despite all these challenges, passion, creativity, and shooting for differentiation will decide which of the startups succeed finally. Also, the question is not how high-funded the companies are, the real question is, after a period of consolidation, which companies grown on with sustainability as the backbone.