Deploying own fleet helps food delivery companies

In order to shorten delivery time, food delivery apps are increasingly moving towards deployment of their own fleet to fulfill orders. This has helped them grow 15 per cent quarter on quarter.

The industry witnessed an increase in self-delivery from 46 per cent in Q4 of 2016 to 56 per cent in Q3 of 2017. Swiggy currently has almost 100 per cent self-fleet and does not use third party logistic providers to fulfill orders. Zomato had acquired Runner and Foodpanda has more than 50 per cent of their deliveries through self-fleet.

This move resulted in a fall in overall delivery time of the industry from 47 minutes in Q4 2016 to nearly 42 minutes in Q3 2017. This has altogether increased the reliability on timely delivery. The shift was well received by the stakeholders of the industry as it brought an increase in the overall stakeholder experience relying majorly on the delivery time satisfaction.

The industry now has a higher control on the overall delivery process. The food-tech industry with the increase in per day orders has become more of a logistics play and hence the industry has shifted towards the self-fleet model to have a better control in the overall delivery process, finds digital technology research firm RedSeer Consulting.

“It is becoming increasingly clear that food tech is more and more of a logistics play, restaurant discovery is not a deep competitive advantage. There are clear trends on customer and seller satisfaction supported by the better delivery speed and compliance that vouch for superiority of the captive delivery model in Indian market,” Anil Kumar, Founder and CEO, RedSeer Consulting said.

As a result of this improved efficiency, the food-tech industry is witnessing more than 15 per cent increase in daily orders quarter-on-quarter. Top seven cities make more than 10,000 orders per day.

Chennai, Bangalore, Delhi, Mumbai, Pune, Kolkata and Hyderabad together contribute to nearly 87 per cent of the overall market.

Sangeetha G.