On Thursday Foodpanda raised $110 million in a fresh round of fund raising from Rocket Internet and other investors. Since 2012, Foodpanda has raised over $200 million and plans to invest into product and technology. With the entry of Zomato and TinyOwl in the online food ordering space, Foodpanda wants to focus on providing the best customer service to its users. In an interview, Rohit Chadda, co-founder and managing director of Foodpanda, tells Neha Bothra about plans to tap potential in tier 2 and tier 3 cities, and increase restaurant partners from 12,000 to 15,000 in the next six months. Here are edited excerpts.
Q. Currently, what is the order rate at Foodpanda and what is the average value of each order?
We earn revenue from the commission we earn from restaurants on every successful order that we place. In terms of traffic, we get around 1,30,000 to 1,50,000 visitors each day. I can’t share how many of these convert into transactions. The average value of each order ranges between Rs 500 to Rs 550. This is higher on the mobile platform. Around 45-48% of our transactions come from our smartphone based application, and the transaction size on this platform is 20% higher than on the web.
Q. How much revenue does India contribute to the overall business?
That’s confidential information and I cannot share revenue details. But, India was one of the earlier countries to start and India has a lot of potential. So, India has always been an important global market for revenue contribution to orders and otherwise. We have seen some very rapid growth. To give a general trend, till Q3FY14 we were growing at about 100% q-o-q and now we are growing at around 25-30% m-o-m.
Q. What are your expansion plans?
In terms of geographical coverage we are there in 200 plus cities. What will come is depth in those cities. We’ll continue to add more restaurants to these cities. So while the major ones have already been covered very well in terms of the depth of restaurants we will continue to add restaurants in tier 2 and tier 3 towns because we realize the potential in these markets. .
Q. Given your focus on the smart phone platform, are you seeking technology enabling partners? In-app cashless payment partnerships for example?
Absolutely, this is interesting for us and we are actually working on it. We have partnered with major wallet providers like payumoney and paytm. We are a mobile first company and we concentrate very strongly on our app. A large share of orders will come from the mobile versus web.
Q. How many restaurants are you looking to tie up with in the next six months?
At present, we have 12,000 restaurants. In the next six months we will probably be at around 15,000 restaurants across India. We believe in quality over quantity. We have always concentrated on adding good quality restaurants, and if we see that a restaurant is not really performing- then we take it of from our coverage. The most important thing for us is consumer experience.
Q. Zomato has announced plans to enter the online food ordering business. It has a listing of around 50,000 restaurants. How does this affect your business?
We concentrate on home delivery. Zomato of course has a presence across the board. The number of restaurants that deliver out of those 50,000 is going to be smaller than that. It is a different ball game all together- listings and online ordering. And we’ve established Foodpanda as a reliable player in the online ordering platform. Zomato is still new in the entire scenario. I think we’ve got the trust of the consumers in terms of fulfillment. So I think we will be fine.
Q. With new entrants like TinyOwl and Zomato in the online food ordering platform, what is your strategy to retain market share?
There is room for multiple players and this will help develop the market faster and help us grow even faster. It is basically customer experience and that is what would keep a consumer on Foodpanda. So hence this is the reason why we look very closely into the restaurants that we have and very closely monitor their performance as well. Then of course it is also the ease of the use of the application and we feel that once you are there in the mobile of the consumer then there usually aren’t other applications for the same purpose unless there is something terribly wrong with us. So once we can make a consumer loyal by the experience that we offer them there is no reason for him to go to anyone else.
Q. What marketing strategies have you implemented?
We feel that Indian consumers are very value driven. So we’ve tried to ensure that we have some good deals from the restaurants. So we have some exclusive deals from quite a few restaurants which give the customer another reason apart from the convenience that is there that is the main value proposition that we offer. The value that we try and offer on the food itself also gives customers another reason to come and try us out.
Q. So will the competition put pressure on the commissions you earn from restaurants?
No not really. It is a lot about relationship management and we have been associated with restaurants over the past two years and have helped them develop their market, their online footprint in the market and have helped them get a presence online. So they obviously appreciate that and we also help them in many other ways with market intelligence and data and this basically further solidifies the relationship.
Q. How has the association been with Rocket Internet?
Well I think rocket backs you very strongly and it is great to have that backing. And also the number of ventures rocket has funded across the group you get to interact with people from other ventures and learn from them as well and makes the learning curve much faster.
Q. What kind of synergies have you developed with Tastykhana and Just Eat?
They are functioning as separate entities and we are continuing as we were before the acquisition. But while we continue to operate as separate entities we definitely make sure that synergies are taken advantage of. Restaurants on Tastykhana can be listed on Foodpanda and vice versa. We benefit by learning from each other at all operational and marketing levels.
Q. Are you evaluating any more acquisitions?
It’s difficult to say. We will consider it as and when required.
Q. What are your listing plans?
I can’t comment on this.