Restaurants see last-mile delivery as key asset; prefer own delivery over aggregators

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With the competition heating up in the estimated $10 billion Indian food delivery market, what are the benefits of delivering yourself versus via an aggregator like Zomato or Swiggy? To discuss this and more CNBC-TV18 spoke to Rashmi Daga, founder and CEO of Freshmenu and Raghav Joshi, Co-founder and CEO of India Business at Rebel Foods.

With the competition heating up in the estimated $10 billion Indian food delivery market, what are the benefits of delivering yourself versus via an aggregator like Zomato or Swiggy? To discuss this and more CNBC-TV18 spoke to Rashmi Daga, founder and CEO of Freshmenu and Raghav Joshi, Co-founder and CEO of India Business at Rebel Foods.
“Today about 30 percent orders are directly on own platforms which we deliver to customers, 70 percent are through aggregators like Zomato and Swiggy,” said Rashmi Daga.
Last-mile delivery is a huge factor in convincing consumers that they will get good quality food.
"Zomato offers the widest array of restaurant choices to consumers. So we believe that people would also use them. I don’t think we are competing with them. There is technically a partnership because we want the entire market to grow," Daga added.
The delivery food business is still a small but ever-expanding part of the overall food business.
“I think aggregators and restaurants both have to coexist. In our case 50 percent of our orders are delivered ourselves while working with aggregators on the remaining. We believe that obviously it is important to give the right experience to customers and delivery and owing delivery allows us to ensure that,” said Raghav Joshi.
“We also prefer to do deliveries ourselves, but as Rashmi said there are obviously advantages of aggregators helping customers in restaurant discovery and both the models have to coexist,” he added.
The average order value pre-pandemic used to hover around the Rs 300 mark, as per Joshi.
During the pandemic as people shifted back home and the meals proposition became less important, the focus shifted to craving-based food.
"Pizza, briyani, desserts etc. That is where we started seeing average order values going up as a mix towards the premium end of the segment,” Joshi added.
For the full interview, watch the accompanying video

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