Private LLC
Business Plan for Online Food Ordering Services Controlled Document
Business Plan for Online Food Ordering Services Business Plan for Online Food Ordering Services Contents
Executive Summary............................................................................................... 3 Business Overview................................................................................................. 3 The Opportunity..................................................................................................... 4 Industry................................................................................................................. 4 Services................................................................................................................. 5 Market Analysis...................................................................................................... 6 Online food ordering market size....................................................................7 Strategy................................................................................................................. 8 Foodjeep USP................................................................................................... 8 Marketing Strategy.......................................................................................... 8 Pricing Strategy............................................................................................... 8 Sale Tactics...................................................................................................... 9 Competition......................................................................................................... 10 Exit Strategy........................................................................................................ 11 Financial Analysis................................................................................................. 11 Revenue Plan................................................................................................. 11 Management........................................................................................................ 12 Current Investors................................................................................................. 12
FOODJEEP – Online Food Ordering e-Shop
Quality time Rejoice cuisine 2
Business Plan for Online Food Ordering Services www.foodjeep.com
Executive Summary Online food ordering services has been catching up in India. The online food ordering services work in supplementary to the food delivery business ecosystem. It is rather enhancing the business prospect of all food delivery business services. The food delivery segment has seen a surge in demand over the years in tandem with the change in consumers food habits and lifestyles trends, with increasing disposable incomes clubbed with work and hectic schedules. It is also helping user overcome constraints in terms of time, logistics and convenience. As per recent Industry report Indian food services industry stand at US$10.5 billion in 2013. The food services industry expected to grow at CAGR of 15% to be pegged at US$21.5 billion in 2018. The estimated number of restaurants all over India that carry out home deliveries is around 50000. At present market, a few top market player put together could only cater to 6000+ restaurant across 20+ cities. In 2012, Foodpanda had approximately 100000 orders which was roughly 10% of Indian online food ordering market size. Online food ordering services has potential client base from following market segment:
Home delivery food market Institution, campus & university food delivery market Office food delivery market
In online food ordering services businesses differentiate itself from other competitor based on their USP, relationship and assurances. Foodjeep outlined its own USP. Present investor in Foodjeep – online food ordering services are founding members. Start up investment in Foodjeep will be Rs.2.97million. With its strategic plan and balances Foodjeep is expected to breakeven within first year.
Business Overview Foodjeep is an online food ordering system or online restaurant aggregator that enables users to order food from various restaurants that are available on the Foodjeep website and mobile platform. The system is web based and has mobile web integration it allows users to order their favorite foods from their favorite restaurant and then wait for a confirmation as for food get delivered to their address.
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Business Plan for Online Food Ordering Services The Opportunity The food delivery segment has been seen a surge in demand over the years in tandem with the change in consumers food habits and lifestyles trends, with increasing disposable incomes clubbed with work and hectic schedules, first point. Second point is that the increasing congestion levels and longer waiting times at many a restaurants having swayed a section of consumer into going for the convenience of ordering – in rather than eating out. Thirdly, ordering food by calling is inefficient, costly and has no order accuracy. Improvement in technology, access to internet and mobile communication scaled up the demand, as consumer now have more accurate, efficient, and convenient means of ordering food from their office or residence. Forth demand driver for these formats is the growth of multinational corporations in commercial hubs across cities, leading to a higher number of expatriate office goers staying away from their hometowns preferring home delivery instead of dine-in and cooking. Last but not the least important factors is that people like to order in food for the sake of convenience and avoid hassles of travelling to restaurant, traffic jams and parking. The Foodjeep online food ordering solution will create a win-win ecosystem for all stake holders.
Industry Online food ordering web site service is very recent in India. Online food ordering platforms follow a simple business model. These systems act as a common platform between customers and restaurants. User search for restaurants, place order with their chosen restaurant, and pay for it online or opt for COD (cash on delivery).
The delivery part is handled by restaurant owner. Some of the salient points of the business model are: Online food ordering system partner with local restaurants that offer home/ office deliver, and prepare a database. For every order placed through the website, the restaurant gives a pre-decided commission. Restaurants can also get featured on the website homepage for publicity. 4
Business Plan for Online Food Ordering Services The industry segment is categorized in food services sectors. As per technopak estimate Indian food services industry1 stand at US$10.5 billion in 2013. The food services industry expected to grow at CAGR of 15% to be pegged at US$21.5 billion in 2018. The segment is totally unstructured. Only 14.3% which account for $2billon Indian food services market is structured2. The estimated number of restaurant 3 in India that carry out home deliveries is around 50000, signifying that a huge untapped market potential are there in this sector. Some
of the factors that are probably affecting the market growth are: Operational Logistics Services
The industry segment is very new with huge growth potential. There are huge opportunities to provide services in these sectors. The industry segment is such that it creates a collaborative complimentary ecosystem for all the stake holders. Even a existing online food ordering plat form can also be seen as a collaborator at present market condition. The market opportunity is open to new entrants with least barrier to entry. Company can start from a concept level to operation level or can directly move on to operational with third party solution. Technologies are readily available in the market.
Services Online food ordering services – where restaurant across different cities sign up our premium services which become active only after post sale or order booking. The clients [online food booking service users] get the benefit of choosing their best restaurant and food in their convenience or comfort. This online food ordering system has two-fold opportunity in the organized food services market. The first opportunity is for the brick – and – mortar food services player who intend to tap into delivery market to significantly increase revenue. The second opportunity is for the take away / QSR restaurant to focus on delivery market as a sole channel for generating revenue. Restaurant registered with Foodjeep will have: Its address and entire menu online, with items listed under separate categories such as gravies, appetizers, desserts etc. 1 http://www.technopak.com/ [ QSR_Market_in_India.pdf] 2 http://www.business-standard.com/article/companies/vcs-grab-a-bite-of-online-food-servicesmarket-113102300840_1.html 3 http://www.digit.in/internet/india-s-online-food-delivery-segment-still-in-nascent-stage-justeat-ceo-riteshdwivedy-19776.html
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Business Plan for Online Food Ordering Services The user can simply select the restaurant of his choice and add the required items to the cart to place his order. Filters like location, cuisine etc are also present wherein the user can just enter his location or the cuisine he wishes to have and the restaurants available under the respective headings will appear, making it customized according to the specific user’s preferences. Both the options – cash on delivery and online payment – are available for a majority of the restaurants. Also, an instant order tracking system is available through which the user can track the status of his order using the unique order reference ID. These features coupled with a very user-friendly app interface make ordering food online very simple on the go, anytime and anywhere.
Market Analysis The Indian food delivery market is pegged at $10.5 billion today and is growing at a very steady pace. The food delivery market is expected to grow at CAGR of 12%. The estimated number of restaurants all over India that carry out home deliveries is around 50000. There are only few market player in providing services for online food ordering services. The top two market players put together only cater to 6000+ restaurant across 20+ cities. This shows an immense untapped market potential lying in store for us in this business, which can be tap amidst changing mindset of foodies from ordering food over phone to online ordering.
Prospective Customer Base FoodPan % of Location da Average Total Subscriber 3500+ Mumbai 238 6% Delhi 149 3% Bangalore 152 6% Hyderabad 159 13% Ahmadabad 115 31% Chennai 79 5% Kolkata 156 16% Surat 11 0% Pune 159 11% Jaipur 149 14% Nagpur 0 0% Indore 0 0% Thane 43 6% Bhopal 0 0% 6
Juste at
% of Average
Zoma to
Trip Advisor
Avera ge
NA 156 180 176 18 17 112 8 14 158 10 7 9 0 7
4% 4% 7% 2% 5% 7% 1% 0% 11% 1% 5% 4% 0% 0%
1958 5715 1713 864 746 989 653 0 946 587 0 480 1260 0
5766 3597 3152 1501 0 2145 1345 0 1872 1520 307 0 231 0
3862 4656 2433 1183 373 1567 999 0 1409 1054 154 240 746 0
Business Plan for Online Food Ordering Services Sub - Total Subscriber
1410
8%
872
5%
1591 1
21436
18674
As per the expert review national capital region, Mumbai and Bangalore covers more than 60% of business revenue for online food ordering services provider. As per our research the present online food ordering service provider only able to meet the demands on these three location as follows: National capital region or Delhi – 4% plus Mumbai – 6% plus Bangalore – 7% plus Technopak data4 showed that 78% of the food services outlets in Mumbai have delivery options. It is 61% in the Delhi National Capital Region and 48% in Bangalore. In 2012, Foodpanda had approximately 100000 orders which was roughly 10% of Indian online food ordering market size. Based on this data it can be estimated that Indian online food ordering market size is approximately one million orders per annum.
This estimate revel there is huge gap even this three important market. In tier I cities there are Pune, Chennai and Hyderabad are very upbeat at the present market condition for online food ordering services market. Online food ordering market size The entire food delivery market size is US$10.5 billion in 2013. The market has a huge potential and showed having very high growth rate at researched timeline. Online food ordering services has potential client base from following market segment: Home delivery food market Institution, campus & university food delivery market Office food delivery market The online food ordering platform has potential market growth rate of CAGR 12%.
4 http://www.technopak.com/ 7
[ pg-80-81-NRAI-Delivery-Format.pdf]
Business Plan for Online Food Ordering Services Strategy Foodjeep will allow Restaurants to join our site free of charge and hope to enlist over 2000+ Restaurants with in the first years of operation. We will position Foodjeep in collaboration with the Restaurant owner to offer discounts on online order and coupons to regular customers. Foodjeep USP Foodjeep will differentiate itself from other market player by: Freedom – in selection of restaurant, food, cuisine, payment mood, delivery or take away, type of hard ware to use in ordering. Ease – a fast and convenient option with mobile apps, cross browser support, order automation, online payment, on delivery payment. You – Foodjeep will listen and attend to your need immediately. The core value of our USP will be H2H [human – to – human] services or attention, as we are in business of human needs. Marketing Strategy Our Marketing strategy will be to advertise to consumers through subscribing restaurants, Delivery outfits and social sites. Foodjeep will also carry out promotions to institutions and companies. Online promotion of subscribing restaurant through our platform Pricing Strategy There will be no charge in signing up for our online food ordering services. Fodjeep will collaborate with restaurant owners to work on commission basis on a pre-agreed terms for all successful order through our services. Sale Tactics A comprehensive core process of selection of restaurant will be done based on local search volumes, popularity and several other factors. Sale and marketing team local to city – for signing up, address, restaurant details and menus Operation team local to city – to collaborate with the restaurant to make it updated and make it live Foodjeep will also apply some of the traditional process of sale like: 8
Business Plan for Online Food Ordering Services
Advertizing and promotions Trade show Trade magazine and advertisement Direct mailing Internet Others
Foodjeep Marketing Strategy
Competition This is a new growing market business segment. There will be huge opportunity for growth for all market players on short terms. The business model evolves from the idea that clients order food over phone to their local restaurant or to restaurant that have delivery logistic in place. So in real term the business model exist in its success of conversion of the conventional and long established method of ordering food over the phone from restaurants. Thus, Foodjepp will consider them as the actual competitor. At present market condition the other online food ordering service provider will be like our complimentary services. As far as other restaurant including pizza hut, mcdonald, KFC etc who take online order for delivery, our services will be supplementary services to them as long as it increases their gross earning. Following are the statistics of two major player of online food ordering service provider in India: Two Prominent Competitor Matrix of Foodjeep
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Business Plan for Online Food Ordering Services
SWOT Mind map Drawing of Foodjeep
Exit Strategy Exit strategy will be based on equity sale out.
Financial Analysis Foodjeep Roll Out Plan Number of cities: 14 Name of cities: Mumbai, Delhi, Bangalore, Hyderabad, Ahmadabad, Chennai, Kolkata, Surat, Pune, Jaipur, Nagpur, Indore, Thane , Bhopal Proposed Commissioned Rate: 10 % will be charged on all successful online food ordered through our services. Setup Cost: Rs. 0.5milion 10
Business Plan for Online Food Ordering Services Operation Cost: Rs.0.15million Renewal Cost: Rs.0.1million Man Power Cost: Rs.0.22million Advertizing & Marketing Rs.2million Revenue Plan National capital region, Mumbai and Bangalore will be core target market with stress on Pune, Hyderabad and Chennai where the market is a bit upbeat. Our interest will be in fulfilling the local selection, taste and interest for the target market. Foodpanda operation in 2012 has: Total number of order in First Year 100,000 Revenue Was Rs. 6 Crores in 2012-13 Average order size Rs.600 per order Restaurant average minimum order size for delivery: Rs.450 / per order Minimum number of order per location: 100 Commission rate: 10% of successful sale order Minimum number of restaurant to sign up: 200 per location Financial Projection – In Excel Model annexure
Management Our team comprises of: Marketing Operation Technology Online Marketing Sale
Current Investors Present investor in Foodjeep – online food ordering services are founding members. We have put together start up seed capital of Rs.2.97million.
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