Friday, April 12

Decoding: Why Food Tech Startups Are Not Successful in India?

Last year before Diwali we covered an interview of  a 25-year-old Bikaneri sweet shop owner from Noida “What kind of Startup Services a “Bikaneri Sweet Shop” Owner Needs?”. Here we mentioned each and every point of a sweet shop owner needs from food tech startups. Though after a gap of one year we still feel that none of the food tech startups taking a lesson from it. Due to lack of perfect business model and strategy, most of the shop owners stop using online food services.

 

Reasons Why Businesses Had to Scale Down

Indian market is not mature enough to order food online. They only order food when there is a discount. Sad but true. We saw 100–150 orders from the single restaurant just for dinner on weekends when foodpanda was running a discount. Immediate next week when foodpanda doesn’t give any offer then a number of orders go down to 10–20 and these orders come only on the weekend. Weekday again 10 orders per day. Haha. An eye opener for us, I realized the saturation that market has achieved and hence shut down the business.

Btw, Same is the case with Swiggy. They get more orders only when they offer discount otherwise volume is really disappointing.

Whereas, Tinyowl usually never gave offers or gave as much as 5 % discount only. They never get orders, maybe 4–5 per day per restaurant. They too had to shut down.

 

Reason Why no one is Investing Anymore in Food Tech Startups

The market is already saturated with a number of players. Supply and demand ratio is not matching anymore and hence investors don’t want to fund food tech startups anymore.

 

Let’s Look From Restaurant Perspective Which is Again Insightful

Restaurants are not excited about these food tech startups either. Why? These startups take 10–15% of profit margin which doesn’t leave restaurants with enough margin.

 

They Don’t Even Want to Work With More Startups Anymore

Why? These startups get them many orders sometimes that they can’t fulfill the orders and delivery on time(Imagine making & delivering 100 orders in just 30–45 mins time span, it’s impossible. We couldn’t do it even with 5 delivery boys in 3 km radius). It has starting to affect their brand in a negative way now(with so less margin) since customers think that it’s restaurant responsible for a poor experience.