With Ola acquiring FoodPanda, is foodtech hotting up for a delivery battle?

Towards the end of 2017, Ola re-entered the foodtech space by acquiring Delivery Hero’s Foodpanda. Since then foodtech again has become a hot topic.

In December, Ola announced it acquired food delivery FoodPanda, and pumped $200 million into the company.

Foodpanda currently claims to have 15,000 restaurant partners across 100 cities in the country. Interestingly, UberEATS was launched in May this year, starting from Mumbai. Since then, the latter has been aggressively pushing Indian market by acquiring delivery boys and adding more restaurant partners each passing week.

Foodpanda was one of the casualties of the 2016 foodtech bloodbath that saw several food startups lose their footing, Swiggy and Zomato were the survivors. Both have not taken their top spot for granted.

Swiggy has a cloud kitchen space; in a span of two months it launched Swiggy Access and also acquired 48East. Besides, it is testing Swiggy Pop, a short-time delivery service in Koramangala, Bengaluru.

Zomato, on the other hand acquired Runnr and launched Zomato Gold in India. Swiggy raised a Series E funding, but Ola pumping in $200 million is arguably one of the single largest investments made in this space. Ola recently raised $1.2 billion from SoftBank. It is also interesting to note that Uber is set to raise $10 billion from SoftBank.

On-time delivery a major focus 

RedSeer report points out that foodtech will be ruled by the players with high-quality captive delivery capacity capabilities. In that sense, to control delivery, Runnr will help Zomato grow. The report said:

“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 in customer and seller satisfaction supported by the better delivery speed and compliance that vouch for the superiority of the captive delivery model in Indian market.”

Own fleets will win the race

Today, one of the major expectations of the customer is on-time delivery. Deliveries fulfilled by restaurants have lower delivery compliance as compared to those fulfilled by the in-house fleet or third-party logistics players.

The leading online food-delivery player provides a significantly superior experience to partner restaurants - especially on aspects that matter most.

“When restaurant partners work with online food platforms, they have especially high expectations for business growth and payment settlement experience. RedSeer research shows that the best performing food delivery platforms in the sector are able to perform very highly on precisely these critical partner experience parameters, amongst others,” the report stated.

In the US, UberEats took a year to break into its competition’s space and did so by being patient. Whether they can wait in India too, with the existing strong players, only time will tell. Also, Ola will now compete with Swiggy and Zomato. Looks like the foodtech run is again set to begin in India.