May, 2017     

Are Restaurants and Consumers embracing online food delivery Yes, they are BIG time!

India’s online food delivery market saw a rapid growth in the order volume coupled with higher seller satisfaction while reduction in delivery cost improved the overall unit economics of the sector.

The online food delivery market saw an increase in daily orders by 32% while the average order value declined marginally by ~3%. We believe this has been due to the rise of new users in the platforms. Which has resulted in the reduction in repeat usage and no. of orders per customer. Despite the increase in the customer base, the players have been able to improve the delivery time and compliance. And hence the customer satisfaction with delivery time improved despite overall NPS being stagnant.

With the rise of new customers and increase in orders the partner restaurants saw an increase in the online share of business. This led to an increase in the partner satisfaction by 900 basis points but timely resolution of complaints remains a key area of concern for them.

The players started marginally increasing the commission rates and reducing the incentives, which led to an improved unit economics for the sector.