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Money can’t buy victory in Food Delivery war

By Akshat Bansal 25th June 2018

For many years, the food industry was considered as restaurant industry before the advent of the internet. The Internet allowed us to broaden the reach and offer convenience to the consumer by allowing them to browse through various restaurants that offer delivery of food. Later on, many enterprises stepped into food delivery space offering delivery of food from multiple restaurants by managing their in-house delivery agent fleet. This allowed many restaurants to enter into the delivery business who didn’t have the facility of delivering food.

Many companies geared up in the past to disrupt the food delivery industry but they were unable to deal with the growing pain and started to fall. The number of companies could barely survive for a year and have to close down the gates in less than a year. It’s not that they were unable to meet the customer demands, instead, they were so small players to stand in front of industry leaders. Indian food ordering company Swiggy experimented by implementing surge delivery pricing just like Uber but have to drop the idea. Swiggy realized at the early stage that surge pricing in food delivery business makes no sense and one can’t just copy-paste uber business model in every industry.

Food Delivery

World’s leading companies Google and Uber planned to step into food delivery in India in 2017. Entering into food delivery industry might be easy but disrupting the food delivery industry wasn’t easy for big giants like Uber and Google. Google and Uber have the cost advantage to grab the market easily, but food delivery industry can’t be tapped just with money. Innovation is the key to tap any market in any industry. Money can just fasten the process but innovation to develop the solution to meet the consumer demand is the only success mantra.

Big players like Uber and Google can easily capture the food delivery industry around the world because of the massive capital base. The capital base can make it easy to wipe off the smaller player. In fact, every player is small when compared to Uber and Google. Food delivery industry is like a puzzle for big brands too as smaller players already have a loyal set of customers. It has been seen that in food delivery industry customer sticks to the single delivering platform even if he/she might have to pay a little extra amount. The customer usually doesn’t switch to a different platform as it is more convenient and lack of awareness about offering offered by other competitors.

Why it’s difficult to mess with Food Delivery Market Leaders?

Ever wondered that the market leaders in food delivery industry in any country started from scratch with no experience or big name in any other industry. No experience actually helped the smaller players to be the market leaders today, as they haven’t imposed any restrictions on the restaurants listed on the platform. Restaurants are allowed to list themselves on multiple platforms.

In the near term, there’s always space left in every industry to enter. Food delivery industry seems to be at the maturity stage but still, the new “S” curve can be seen with the advancement in technology. If you are a big player with the tonne of money or a small startup planning to enter in food delivery space, offer points of parity with betterment and in addition point of difference is essential to make a new space in the highly competitive industry.

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