Smartphones bring 45-48% of transactions and 20% bigger orders: Rohit Chadda

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Updated: March 14, 2015 12:59:40 AM

On Thursday, Foodpanda raised $110 million in fresh funding from Rocket Internet and other investors...

On Thursday, Foodpanda raised $110 million in fresh funding from Rocket Internet and other investors. The company, which has raised over $200 million since 2012, plans to invest in products and technology. Following the entry of Zomato and TinyOwl in the online food ordering space, Foodpanda plans to differentiate itself with the best customer service. Rohit Chadda, co-founder and managing director, Foodpanda, in an interview with Neha Bothra, talks about his plans to tap into Tier 2 and tier 3 cities and to increase the number of restaurant partners from 12,000 to 15,000 over six months. Excerpts:

What is the order rate at Foodpanda and what is the average value per order?

We earn revenue from the commissions we get from restaurants on every successful order we place. In terms of traffic, we get 1,30,000-1,50,000 visitors a day. I can’t share how many of these convert into transactions. The average value of each order is Rs 500-550. 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 that on the web.

How much revenue does India contribute to the overall business?

That’s confidential! But India was one of the first off the blocks and has a lot of potential. It has always been an important global market for revenue contribution to orders and otherwise. We have seen some rapid growth. To give an idea, till Q3 FY14 we were growing at about 100% q-o-q and now we are growing at around 25-30% m-o-m.

What are your expansion plans?

In terms of geographical coverage, we are there in 200-plus cities. What will come is depth in these cities. We’ll continue to add more restaurants. 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 since we realise their potential.

Given your focus on the smartphone platform, are you seeking technology enabling partners, such as in-app cashless payment?

Absolutely! This is interesting for us and we are actually working on it. We have partnered major wallet providers like payumoney and paytm. We are a mobile-first company and we concentrate very strongly on the app. A large share of orders will come from mobile versus web.

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 have around 15,000 across India. We believe in quality over quantity. We have always concentrated on adding good quality restaurants — if we see that a restaurant is not really performing, we take it off. The most important thing for us is consumer experience.

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. Compared to listing, online ordering is a different ballgame altogether. Zomato is still new to the scene. I think we’ve got the trust of the consumer, as far as fulfillment goes. We are going to be fine.

With entrants like TinyOwl and Zomato in your space, what is your strategy to retain market share?

There is room for multiple players and this will help the market, as well as us, grow faster. Customer experience is what will help us flourish.

That is why we closely monitor restaurants. Then, it is also the ease of use of the app. Once you find space on a consumer’s mobile, he doesn’t use other apps for the same purpose unless there is something terribly wrong with you.
So once the consumer becomes loyal due to ease and quality of experience, there is no reason he will go anywhere else.

What’s your marketing strategy?

The Indian consumer is very value-driven. We’ve tried to ensure that we have some good deals. So, we have some exclusive offers that give the customer another reason, apart from convenience, which of course is the main value proposition.

Do you see competition putting pressure on your commissions?

Not really. It is a lot about relationship management and we have been associated with restaurants for the past two years, helping them develop a market, an online footprint. They appreciate that. We also help them with market intelligence and data, which solidifies the relationship.

How has the association been with Rocket Internet?

Rocket backs you strongly, and it is great to have that kind of backing. Besides, given the number of ventures rocket has funded, you get to interact with people from other ventures and learn from them. All this makes the learning curve steeper.

What kind of synergies have you developed with Tastykhana and JustEat?

They are operating as separate entities. However, we definitely make sure that the synergies are taken advantage of. Restaurants on Tastykhana can be listed on Foodpanda and vice versa.

Are you evaluating any more acquisitions? Do you plan to list?

Tough to say. We will consider acquiring companies as and when required. As for listing, I can’t comment.

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