It is said that India’s food industry is over 200 billion and will continue to grow over the years. With cheaper access to internet as well as smartphones, a number of new startups have risen over the years taking advantage of the internet services we enjoy, making our life easier.
Food-delivery apps have been on a rise since the past few years. The ease of ordering anything from the palm of our hands and also for much cheaper price thanks to the amazing discounts these apps provide.
Zomato, Foodpanda & Swiggy are well-known names amongst the industry. In the race for being #1, these companies continue to face huge losses every quarter. With Uber entering the competition with its food-delivery app UberEats, the competition just gets even more better for the consumer but not much for the giants. Let’s take a look at how these companies are doing :-
Founded in 2008, Zomato is the #1 platform for searching and discovering restaurant. It is reported to have over 191 million users daily. They started their Food-Delivery services back in July 2015 and as of September 2019, they have said to receive over 21 million orders every month. Despite having such a huge user base, Zomato continues to face huge losses every quarter.
Current Worth : Over $2 Billion
Revenue in FY18 : $74 million
Loss in FY18 : ₹106.3 crores
Revenue in FY17 : $51 million
Loss in FY17 : ₹466.3 crores
Zomato has significantly improved from FY17 to FY18. With this plan, they’ll surely be able to overcome their losses in FY19 or FY20.
Founded in 2014, Swiggy has been hugely popular amongst the masses with great discounts and quick deliveries. With over 10 million downloads, it continues to grow its user base. With its goal of covering small-side food joints to high-end restaurants, Swiggy has expanded to over 35,000+ restaurants to choose from. Backed by Nasper, Swiggy continues to face huge losses every quarter.
Current Worth : Over $1.3 billion
Revenue in FY18 : ₹441.99 crores
Loss in FY18 : ₹397.31 crores
Revenue in FY17 : ₹205.16 crores
Loss in FY17 : ₹133.06 crores
Swiggy really needs to rework on their strategies else they might actually get bankrupt in the coming years.
Founded in March 2012, Foodpanda delivers in over 10 countries. Once the top choice of users for food deliveries, it has been facing tough competition from apps such as Zomato and Swiggy. It has now been acquired by cab-giant Ola for an undisclosed amount. It will be interesting to see Uber’s UberEats and Ola’s Foodpanda competing in the online food-delivery space. The Foodpanda India CEO Saurabh Kochhar has said the company aims to be profitable by FY19.
Investments raised : Over $318 million
Revenue in FY17 : ₹62.16 crores
Loss in FY17 : ₹44.81 crores
Revenue in FY16 : ₹37.81 crores
Loss in FY16 : ₹146.64 crores
Foodpanda has minimised their losses and it’ll be interesting to see whether they reduce their losses in FY18 as well.
Uber has finally launched their Food-Delivery app UbeEats in India and is pushing the service into more and more cities. Backed by the Taxi-giant Uber, they have earned the people’s vote by offering amazing discounts and made a good name in the market of already dominating names such as Zomato and Swiggy. One of its key features which none of its competitors have is offering coupon discounts on Cash On Delivery, a game changing move. Let’s have a look at how the giant Uber is doing :-
Current Worth of Uber : $70 Billion
Revenue in Q3 2018 : $2.95 Billion
Loss in Q3 2018 : $939 Million
UberEats Gross Bookings Amount in Q3 2018 : $2.1 Billion
Uber has said they expected these losses as they are investing huge amounts to grow in Middle-Eastern Asian Countries such as India. They are planning to expand their new Food-Delivery and bike-scooter hiring service in more countries over the next few years. Also, Uber is looking forward to an IPO to which experts have said will make the company worth over $120 billion.
And a random bonus loser every year : PhonePe.
PhonePe is a UPI-based payment service which was started in 2015. You can recharge mobile phones, pay telephone, gas, electricity bills and also pay at restaurants as well as pay online. It’s parent organisation is Flipkart. PhonePe has been continuosly in loss since years and continues to do so.
PhonePe lost ₹18 for every rupee earned in revenue for FY18.
Revenue in FY18 : 43 crores
Loss in FY18 : 791.03 crores
PhonePe lost ₹42 for every rupee earned in revenue for FY17.
Revenue in FY17 : 3.02 crores
Loss in FY17 : 129.01 crores
PhonePe is having difficulties competing with the likes of Google Pay (Tez) and Paytm. But now that Walmart has acquired Flipkart, it is interesting to see how hard Walmart is trying to capture every sector they are a part of.
In the race of being #1, companies continue to face huge losses every quarter just to dominate the food-delivery space. In the previous years we saw the death of many food-related startups such as TinyOwl, Yumist, EatFresh, Eatonomist to name a few.
The companies continue to face huge losses, but the question is until when? Well I know for a fact companies must have something planned and the losses would have been part of that plan. But we are talking years now here. When will they break? We’ll have our answer in a next few years.