Pan-India deliveries are now nearing 85% of pre-Covid GMV, higher than the 75% recorded in August.
Even in mid-June analysts at HSBC had observed food –delivery was making a comeback across the globe and estimated volumes in India were back at 50-55% of pre-Covid levels.
Small town India is leading the recovery in food delivery. Online orders in Patna, Jamshedpur, Ranchi and Siliguri have now crossed pre-Covid levels, according to a survey by Zomato which showed much of the country has gone back to calling for meals as often as it was before the pandemic. Pan-India deliveries are now nearing 85% of pre-Covid GMV, higher than the 75% recorded in August. And the good news is people aren’t just ordering more often, they’re ordering more at a time.
Analysts attribute the revival in food ordering to consumers’ unwillingness to eat out in restaurants but nonetheless wanting a change from home-cooked meals. Moreover, celebrations on festive occasions such as Raksha Bandhan and Janmashthami are also triggering on-line ordering. “Festivals and occasions such as Raksha Bandhan, Janmashtami, Teacher’s Day, and Independence Day saw a massive spike in orders,” Zomato said. What’s more the ongoing IPL season and the upcoming festivities in October and November should keep the momentum intact. The survey reveals the GMV or gross merchandise value in a handful of affluent residential areas has surpassed that in the pre-Coid period; this trend could spill over to other areas as well given there are few signs the pandemic will be contained in the next few months.
Even in mid-June analysts at HSBC had observed food –delivery was making a comeback across the globe and estimated volumes in India were back at 50-55% of pre-Covid levels. Importantly, they noted the volumes had ‘come through with much higher average order values and much better profitability. “India food delivery was between $3-4bn market before COVID, which should be back to similar levels in 3-6 months, in our view, but with better profitability,” they had written. According to BCG – the delivery market should double by 2022. The trend, however, doesn’t bode well for eateries that earn little from home deliveries. For the fine dining restaurants, where 75% of the revenues are earned when customers eat at the outlet, business continues to be bad and could prompt more owners to shut their outlets. To be sure, more premium restaurants are taking orders. But, about a third of restaurants and bars have closed down and are unlikely to re-open soon. A Crisil report in May estimated the organised dine-in segment’s revenues to fall by 40-50% in 2020-21.