International Journal of Latest Technology in Engineering, Management & Applied Science (IJLTEMAS)

Volume VII, Issue IV, April 2018 | ISSN 2278-2540

Food Ordering Mobile Applications – A new wave in

Food Entrepreneurship
Dr. Sonali Jadhav
AISSMS College of Hotel Management and Catering Technology, Pune, Maharashtra, India

I. INTRODUCTION 2. To analyze the benefits and challenges of the food

delivery apps for restaurants
O nline food ordering is a process that delivers food or take
away, from home chefs, local restaurants and other food
co-operatives through a mobile application or through a
3. To analyze the benefits and challenges of the food
delivery apps for the customers.
website. This style of food delivery is gaining popularity with
more and more people especially the younger generation III. RESEARCH METHODOLOGY
turning to mobile food ordering apps, thereby changing the
way food is delivered and picked up. Customers prefer using 1. Primary Research: This was done through getting
the food ordering app over ordering food online. The questionnaires filled by random customers who eat
customer can generate an order without having to explain it to out or order out and another questionnaire that was
another human being and have the food delivered at his filled by the Restaurant Owners. Most of the
doorstep. questions were related to the benefits and challenges
The apps are geared to search for local restaurants and the of the mobile food delivery apps from the customer
cuisine types. Entire menu is displayed on the app and the and restaurant owners‟ perspective.
customer has to choose from the menu with a click of a 2. Secondary Research: This was through Literature
button. However the app needs to be downloaded by the Review about the concept of a Mobile food delivery
customers on their cell phones and register themselves on the
app and the interest that this industry is garnering.
app by creating their profile which will have their address and
payment information. The payment is normally cashless
through a credit or debit card if paid online or in cash against IV. LITERATURE REVIEW
delivery. The apps will differ from each other in terms of Karan Kashyap has opined that using online food ordering
features offered and by refining the search, based on most services is gaining popularity in Tier 1 cities. The customers
ordered, pricing, order history, customer reviews, promotions prefer eating in, as compared to going out to a restaurant when
etc. there are issues of traffic congestions. This segment has
The number of food delivery mobile app startups are growing therefore seen a growth of almost 100% in the last couple of
at a fast pace and competing with the food delivery section of years.
the restaurant market. The customers are being choosy, given Redseer, a research firm has claimed that the online food
the number of options that are available for them in this ordering and delivery segment grew almost 150% in 2016 in
segment. Initially there was some reluctance amongst the comparison to 2015, with an estimated Gross Volume (GMV)
investors to invest in any food related business but this view of $300 million in 2016. The major chunk of the online food
has changed over the period of time with the realization that delivery business is from the top 5 cities in India, although
there is a tremendous potential for this market sector. Some of this segment is active in almost 20 Indian cities. The players
the most popular mobile food delivery apps are Food Panda, in this segment are consolidating their business by
Zomato, Swiggy, Tasty Khana, Just Eat, Uber Eats, Fresh concentrating on increasing their operational efficiency and
Menu and Scootsy. Some restaurant chains have their own profitability rather than searching for newer markets in other
food delivery apps like Fassos, Dominos, Pizza Hut, KFC and cities. But with large number of players in the market like
Box 8. Swiggy, Food Panda, Zomato etc the customer is spoilt for
II. OBJECTIVES OF THE RESEARCH choice. It has become very convenient for them to browse
through the list of eateries and cuisines in different parts of the
1. To study the concept of Mobile food delivery city and order by just clicking a button on the app.
applications
Zamarud Ansari and Dr. Surbhi Jain, stated the success of
online food delivery startups is mainly because there is a

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 International Journal of Latest Technology in Engineering, Management & Applied Science (IJLTEMAS)
Volume VII, Issue IV, April 2018 | ISSN 2278-2540

steady growth in the ecommerce industry. Some of the competitions, keep their costs low, and reduce their burn rate
challenges faced by the online food delivery businesses is in order to break even and make profits.
delivering within the time frame and optimization of the
Anshoo Sharma from Light speed Ventures opines that the
resources as well as the technical skills of the employees.
potential market for food ordering business attracts investors.
India has more than 400 food delivery apps with more than
This is also a business has a repeat ordering behavior as also
$120 million funding from venture capital firms and other
high margins. It is expected that the huge funding in this space
investors. Food industry is a repetitive business since a
will consolidate similar to the ecommerce space.
minimum 3 meals are consumed by each individual in a day
increasing the frequency of food ordering. This makes the The food aggregators sign up restaurants to an online food and
investors and entrepreneurs optimistic about the growth of this app platform, so the customers have a wide choice to pick
segment. from and the order is then picked and delivered to the
restaurant. The delivery is often outsourced for a fee. This
The food industry startups are also exploring various avenues
results in the companies digging into the profit margins and
and coming up with innovative businesses like creating a meal
the restaurants need to balance their act because while their
box with all the necessary fresh food ingredients to cook as
business increases, there is a price they have to pay.
per the recipe provided to make a meal that the customer
According to Mr. Galatithis would mean up to as much as
chooses or a salad box with ingredients and dressing of the
16% taken away from the profit inclusive of commissions,
customer‟s choice. Such businesses also use the same
GST etc. The restaurants however have no option but to
technology used by the mobile food delivery apps and a
embrace these startups in order to survive in the market where
similar delivery mechanism as a supply chain to ensure
the consumer trend is to buy food online.
effectiveness.
Vishal Krishna talks about the origin of another innovative V. DATA ANALYSIS AND DISCUSSIONS
food business which gives a cooking experience to the
The study shows that the online food delivery business model
customer while ensuring convenience in terms of time and
is highly scalable and capital efficient. This industry is
material procurement. This business creates a meal box with
growing in leaps and bounds because of the huge market.
all the fresh ingredients which are pre prepared to a degree
thereby cutting on the cooking time to 30 minutes to make a Everyone needs to not only eat but eat multiple times a day,
favorite meal. The target market are individuals who love to ensuring repeat orders. Profit margins are high, ordering
online is slowly becoming a way of life. Ordering online is
cook but are unable to dedicate the requisite time to whip up
cheaper than going to a restaurant.
the meal. Happy Cook meal boxes have all the ingredients
required along with a narrative about the food that has been The benefits to the customers are:
ordered. Technology is used for ordering and delivery of the
boxes. 1. Ordering online is fast and one is not put on hold to
speak to the sales person to place an order.
Qualityin food plays a big part in the food business and lack 2. It is easy to order online well in advance. There is no
of quality will adversely affect the business to an extent that it
possibility of misinterpretation of orders since it is
may have to close down if there are any lapses. Food is
perishable in nature making business logistics all the more not verbal.
difficult. The back end operations need to be tightly 3. The customer has the menu in front of him to choose
controlled. This along with an erratic funding where the first from.
round of operations will get good funding while the following 4. The customers have the advantage of promotional
rounds, where the businesses have to manage their own deals and discounts offered.
commercials, act as a hindrance for expansion. Bedsides to
5. Like any other ecommerce business, customers can
lure the customers, companies like Food Panda have spent
between Rs.400/- to Rs.500/- per customer, for customer accumulate loyalty reward points which can be
acquisition. The peculiarity of this business is that while redeemed by them for subsequent orders.
initial orders are not very difficult, subsequent orders pose a Separate questionnaires were given to the customers and the
challenge. restaurant owners / Managers to find out the benefits and
According to IBEF (Indian Brand Equity Foundation), food challenges that are faced by them while using the online food
ordering is a fast growing business. It is also a sought after ordering services. The responses were tabulated and analyzed
business by investors and investments in food ordering as follows:
startups has seen an increase of 93% in 2015. The flip side is The responses of the customers were as follows:
that competition is tough and it is difficult to survive in this
competitive sphere. Businesses that are unable to sustain close
down and others who are in the business struggle to beat

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 International Journal of Latest Technology in Engineering, Management & Applied Science (IJLTEMAS)
Volume VII, Issue IV, April 2018 | ISSN 2278-2540

Awareness about the food Belief that food apps will be the
mobile applications for most preferred tool for food
ordering food online ordering in the future

5% Yes No Can't Say

Yes
27%
No

7%
95% 66%

Of the total customer respondents, 95% of the customers were 66% of the respondents believed that the food ordering app
aware of the various mobile food delivery apps. will be the most preferred tool for food ordering in the future.
The customer respondents rated the level of advantages of
using the app on the following parameters:
Frequency of using the food app
for ordering food Advantages of using a mobile food
delivery app on a 5 point scale (5 being
the highest)
Always Frequently 4.30
4.20
Never Rarely 4.10 4.19
4.00 4.15
Sometimes 3.90 4.00 3.96
2% 3.80 3.92
3.70 3.85
3.60 3.70
3.50
27% 3.40
43%

12%

16%

Observation:
12% of the customer respondents have never used the app,
whereas majority of the respondents have used the app 1. The average response for all the parameters is
sometime or frequently, making it a popular tool used for positive and much above the average of 2.5 on a
ordering food. scale of 5. The respondents clearly feel that using the

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 International Journal of Latest Technology in Engineering, Management & Applied Science (IJLTEMAS)
Volume VII, Issue IV, April 2018 | ISSN 2278-2540

app is to their advantage for the parameters Advantages to the restaurant:

mentioned above.
1. They can save on the service time and effectively
2. Ease of payment is the biggest advantage.
deliver more orders.
3. Convenience and ease of use are the other big
2. Higher scope for increase in sales since they can
advantages.
cater to a larger market.
4. „Availability of options‟ was rated the least
3. Customer tends to spend more when he orders
advantageous amongst all the benefits.
online.
The customer respondents rated the level of challenges on the 4. Ordering accuracy is improved. The customer
following parameters: chooses from the menu and ticks on the app
eliminating a possible miscommunication.
Challenges of using a mobile food 5. Promotional deals, discounts and loyalty reward
delivery app on a 5 point scale (5 points will ensure that the customer comes back for a
repeat order.
being the highest)
The responses of the restaurant owners/ Managers were as
4.50
follows:
4.00

3.50
3.96 Percentage of restaurants linked
3.55 with mobile food ordering app
3.00
3.04 3.11 No Yes No
2.87
2.50 13%
2.44
2.00

1.50

1.00 Yes
87%
0.50

0.00

87% of the respondents said that they were linked with mobile
food ordering apps.

Number of mobile food

ordering apps linked with the
restaurants
More One One to Three
Than More Than Three
Three
Observations: 14% One
1. One of the biggest challenge / disadvantage of using 29%
the app is the inability to return the dish if it is not up One to
to the expectation / not appetizing / spoilt. Three
2. Also with the app, once the order is placed, it cannot
57%
be cancelled or revised. This is found challenging.
3. Use of technology was the least challenging amongst
all the parameters.

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 International Journal of Latest Technology in Engineering, Management & Applied Science (IJLTEMAS)
Volume VII, Issue IV, April 2018 | ISSN 2278-2540

57% of the respondents who were linked with mobile food

ordering apps said that there were linked to up to 3 apps for Does the food apps do any
ordering food. promos for your restaurant
Sometimes Rarely Never
Percentage of sale through the Never
mobile food ordering apps 13%
[CATEGORY
Substantial NAME]
0% [PERCENTAG
E] Rarely Sometime
Negligible 25% s
62%
Negligible
37% Noteworthy
Noteworth
y
63% Substantial

Major
Contribution 62% of the respondents said that food apps carry promos for
their restaurant; 25% of the respondents felt they rarely
promoted their restaurants and 13% respondents said that they
never carried out promotions for their restaurants.
While 37% of the respondents felt that the volume of business The respondents rated the benefits of food delivery apps as
through mobile food apps was negligible, 63% of the follows:
respondents felt that volume of sale through mobile food
ordering apps was noteworthy.
Benefits of using mobile food
Do you feel that the food apps ordering apps on a 5 point scale
are effective and deliver as per (5 being the highest)
the expectations
Yes No Can't Say 3.2 3.125 3.125 3.125
Can't Say 3.1 3
25% 3
2.875
2.9
Yes 2.8
50% 2.7 2.625
2.6
2.5
No 2.4
25% 2.3

50% of the respondents felt that the food apps were effective
in ensuring delivery as per the expectations while 25% were
unable to analyze how effective the apps were in delivery as
per the expectations. 25% of the respondents felt that the apps
were not effective in delivery as per the expectations of the
customers.

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 International Journal of Latest Technology in Engineering, Management & Applied Science (IJLTEMAS)
Volume VII, Issue IV, April 2018 | ISSN 2278-2540

The biggest benefits identified by the by the respondents were While new restaurants are coming up and technology being
enhancement in the business, increased customer base and the need of the hour, India is dominating delivery market of
impact of the customer reviews on the business (beneficial if the world. Investors realize that food is intrinsically has repeat
it is positive but may impact adversely if it is negative. business value and the business models are highly scalable
and capital efficient. There has been a 150% growth in the
online food delivery business in the last year. Most of the
players attribute this growth to 3 factors: internet penetration,
smartphone gaining the status of a necessity in life, and the
restaurants being forced to explore delivery options to
increase their business in the face of competition. The food
delivery business also caters to the customer‟s expectations –
wide choices of restaurants, ease of ordering, convenience of
having the food delivered at home and reduced cost.

REFERENCES
[1]. Kashyap, K. (2017). The food Delivery aps that are competing to
get Market Share in India.The little black book of Billionaire
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[2]. www.forbes.com/sites/krnkashyap/2017/06/26/the-food-delivery-
apps-that-are-competing-to-gain-market-share-in-
india/2/#bf8741868109
[3]. Ansar Z. & Jain S. (2016). Food Portals – The Growth Engine “Do
you have an appetite”. International Journal of Management and
Social research Review, 1 (3), 185
[4]. https://yourstory.com/2016/09/happy-cook/
[5]. https://yourstory.com/2016/04/the-ups-and-downs-of-the-food-
The biggest challenge was bad publicity due to customer startup-world/
reviews. Reduced profit margins was another concern of the [6]. https://yourstory.com/2016/05/swiggy-foodpanda-zomato-
restaurant owners. The respondents felt that it was difficult to financials/
[7]. https://yourstory.com/2015/04/food-tech-startups-india/
predict sales when customers order online. [8]. https://smallbiztrends.com/2016/10/mobile-ordering-app-
benefits.html
VI. CONCLUSION [9]. https://www.computerworld.com/article/2487774/mobile-
apps/how-apps-are-changing-fast-food.html
More than 50% of the food market is in the unorganized [10]. http://www.columbian.com/news/2016/jan/10/home-delivery-pay-
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due to growing urbanization, increasing disposable income,
working women and rapid increase in the use of smart phones.

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