Foodpanda is undoubtedly the torchbearer of the online food ordering industry, managing to retain its lead through the ups and downs in the online space; 4Ps B&M in conversation with Saurabh Kocchar, Co-founder & CEO, foodpanda
Innovation is the key to staying ahead of competition and you have brought in a lot of interesting innovations into foodpanda – like your concept of ‘express meals’, your partnering with Jugnoo (auto rickshaw aggregator) etc. What are your other innovations and how have they fared? Innovation is the core of foodpanda and over the last few years, we have evaluated our business, processes and technology and created innovative technologies and solutions on all fronts keeping in mind reliability, quality and sustainability of our business. We have innovated strongly on the technology side and have been introducing several solutions for better management of food discovery, order processing and for making the delivery experience better. The technology provides significant cost and efficiency improvements for restaurant partners and has furthermore helped to reduce the delivery time for foodpanda customers.
On the front end, it is important to constantly bring new services so as to make sure we provide a better customer experience. Thus, we have introduced new services like the first of its kind quick meal service, foodpanda Express Meals in Delhi and Bangalore, Express Guarantee in Delhi and Pune that promises to deliver food within 45 minutes, and several other tie ups with IRCTC (to deliver food to train passengers), Jugnoo, and many more. With these new innovative services, we are able to reach out to the existing as well as potential consumers and build a stronger consumer base. We are equally focused on providing a reliable experience to our restaurant partners and have developed several proprietary technologies and processes. Also, foodpanda’s restaurant management application allows order automation, synchronization of opening hours as well as menu item configuration. We have also rolled out our last-mile-delivery technology across India and have started to take tighter control of the food delivery process for a large part of its restaurant partners. When it comes to managing operations effectively, we achieved 98% automation rate in order processing, thus reducing manual errors leading to better customer experiences.
In the recent times, the online food industry is seeing a lot of downsizing, devaluations and closures. What are your thoughts on this?
Food delivery business is still at a nascent stage and is riddled with a lot of unique operational challenges. What we need to understand is that every new age industry/ segment goes through four initial phases. Torch bearing is the first stage where a company leads and paves the path in a certain segment; in this case, foodpanda was the pioneer into the food ordering and delivery segment. Going forward, every industry experiences the mushrooming of many players – small and big – and comes up with unique strategies and ideas. This is an experimenting stage where few are successful and a few wind up too; and it is after which, there is a shakeout phase; something that we are witnessing now in the food tech industry. Downsizing, devaluations and closures tend to happen during this phase, while it is a necessary phase to restructure and organize the industry. To be able to sustain through all these phases, it is important to preempt the situation and decide on the course of action accordingly. At foodpanda, we are confident of our performance and our ability to constantly innovate which has helped us grow and sustain our business model. The industry has matured considerably over a period of time and we will now see consolidation of businesses in the coming years. The industry will soon stabilize and the ones who sustain the ups and downs, will witness spectacular growth and progress.
When you took over foodpanda, what were the biggest challenges you faced and how did you resolve them?
When I joined foodpanda, we had just gone through two acquisitions – JustEast and TastyKhana. The biggest challenge was to ensure a seamless integration of the system, processes and the three teams. We had to redefine how we went ahead in terms of people, process and product, and find what’s the right model and right processes. There was obviously some value in what people had followed in nine years versus what we had done in two years. The integrations brought us scale, reach and matured processes.
Being the pioneers and leaders of the food aggregator industry, we encountered situations first and had to adapt and find solutions keeping customer experience at the core. Post the new management coming in place, we heavily invested our resources into processes and technology and also took steps to become sustainable and profitable within the targeted timeline. We made several technological innova-
When Saurabh Kocchar joined foodpanda, the online food ordering platform had just gone through two acquisitions – JustEast and TastyKhana. Right after joining, the biggest challenge for Kochhar was to ensure a seamless integration of the system, processes and the three teams
tions, for example, we built a proprietary data warehouse which makes all type of analysis and reports automatic. We built a point of sale system for restaurants which makes order transmission and menu updates automatic. We have built an automatic campaign tool for our marketing as well.
‘Growth over profits’ seemed to be the mantra for all the big players in India. Your comments?
India is a very challenging yet rapidly growing market. I believe, more than growth, it is important to examine and stabilize operations and processes. Once that is done, then the growth and profits will follow. Secondly, it is important for every company to pick up the right opportunities wherein they can grow and achieve profitability. In the same way in which we are building for the shift from offline ordering (by calling restaurants) to online ordering (through foodpanda’s app), we are also focused on resolving all offline processes from within the organization. I’m very happy about what has been achieved in India towards a higher automation of the business.
Indians love food. The variety of food available across India is mind boggling. What are the unique challenges that a food delivery company is most likely to face in India?
Geographical diversity definitely serves as a challenge and the best example is our delivery system. Singapore, for example, has a pin code for a set of four houses. India has one pin code across four hundred thousand people. People somehow fail to understand the complexity of what goes on behind the scenes. The front-end is seemingly similar but the engine is very different. The challenges on the ground are far bigger than anyone can imagine.
We face issues from mindset to infrastructure to capabilities when it comes to automating each and every restaurant. Mapping technology to locate restaurants and people is a challenge in setting up a delivery network in such a market. 99% of the food ordering market in India is still offline, only a small fraction is online. It’s our constant endeavor to move that offline user base to online.
What are foodpanda’s plans for the coming year?
We are very excited for foodpanda’s future in India and have laid a very strong foundation for our business which has grown over 10 times last year and will continue to rapidly grow this year as well. This year, we aim at providing value through delivering quality, reliability and seamless experience as well as timely deliveries to our customers and partners. We are focused on building scalable revenues and capabilities with a long-term goal.
How do you see the food tech industry evolving in the coming future?
We see a lot of opportunities in the food delivery segment, which is a $15 billion industry. We realize that consolidation of businesses is inevitable and the industry will stabilize in the near future. We see a lot of potential in the business and will always strive to provide the best in class, timely and seamless customer experience. While keeping our focus on customer experience, we have innovated and introduced various services at foodpanda that have helped us achieve operational profitability within the last few months.
Technology innovation will play a big role in the growth of the food sector, therefore, we been introduced multiple tech solutions for better management of food discovery, order processing and for making the delivery experience better and seamless.
What kind of food does the foodpanda chief enjoy?
I am a true blue Punjabi and a food lover. I enjoy everything from Butter Chicken to Mexican and Thai cuisine.