India’s Online Food Aggregators are Taking Lessons from China 

FMT-INDIA

India’s Online Food Aggregators are Taking Lessons from China

Swiggy and Ola have recently approached leading cloudkitchen firms including Faasos, Fresh menu and Holachef, which deliver dishes prepared in their own kitchens, to explore strategic partnerships or acquisitions to own or expand their capabilities in the space.

While none of these talks has materialised into meaningful deals or partnerships yet, aggregators are hoping a synergy with cloudkitchen players will be the booster shot they need to clock higher frequencies of order volumes and purchases.

India’s top two food aggregators, Zomato and Swiggy, currently also offer a cloud-kitchen model as one of their services to help their partner restaurants with back-end supply.

Zomato Infrastructure Services (ZIS), launched in March last year, provides real estate and kitchen equipment support to restaurant brands to scale their order volumes in new localities without having to invest in setting up restaurant branches.

Swiggy, which launched a similar business called Swiggy Access in November, has also found the expansion of the model to vicinities within Bengaluru itself a rather slow process.

The increasing focus and importance on pushing up volumes come as Chinese investors in the market, including Alibaba (through its payment affiliate Ant Financial), Meituan Dianping and Didi Chuxing, which have backed Zomato, Swiggy and Ola, respectively, look to recreate China’s food-delivery success story in India.

Flush with cash following recent fund-raisings, they also have an eye on sector-specific online retail stores as well as travel and entertainment ticketing companies, these people said. This rush for diversified investments has triggered a race of sorts among the Internet giants to evolve into larger e-commerce conglomerates.

This is similar to the one triggered in China by their local internet giants, as the Indian e-commerce companies seek to increase the frequency of transactions on their platforms.

 

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