Covid-19 - the very minuscule virus has held the whole big
world to ransom. Times have gotten hard for everybody & coping up with even
the daily chores have also become tedious tasks. Work for everybody has come to
a standstill and stepping out not only has become a taboo but extremely unsafe.
In India also, Covid-19 has brought a standstill to almost
every virtual sector except the essential commodities. Since the Lockdown was
announced on March 24th, 2020, all operational activities have
stopped and lots of companies irrespective of their size are suffering great
losses. This has led to many Companies taking some unwanted steps like pay
cuts, lay-offs, suspending certain operations and restructuring their business
in order to scale back the losses.
The consumers have become very skeptical about ordering food
online due to the rapid spread of coronavirus. This reflected a 70% drop in the
restaurant business in India since March 2020. The restaurants were directed to
be closed for dining. In India, more than 95% restaurants operate on offline
mode either due to lack of staff or lack of demand thereof. The online food delivery
saw a significant drop by ~70//% in the number of orders in the past two
months, reaching nearly 5mn-6mn orders per month.
Since the food delivery business has been severely affected
and the effect will be there for a short period of time, online food delivery
companies in India like Zomato and Swiggy have taken some drastic steps. Zomato
announced to lay off nearly 13% of its workforce which comprises nearly 600
employees on Zoom video call and along with salary cuts up to 50% for other
members of the company for the next sixth months starting from June.
Joining arch rival Zomato, Swiggy also announced to lay off
nearly 14% of its workforce which is nearly as 1100 employees as Covid-19 has
hit their business across verticals. But all the employees will receive at
least three months salary irrespective of their notice period or tenure. Also,
they will be offering an extra month of ex-gratia to them in addition to their
notice period pay accordingly for every year they have spent with the company.
As the order volumes have reduced drastically, the online
food delivery companies have shifted their focus on online grocery delivery in
order to sustain their revenues and optimize their operational fleet. Market
players such as Zomato, Swiggy and Box8 have jumped to online grocery delivery
in order to cater to the increasing demand as a result of panic purchase either
by tying up with grocery stores or by partnering up with existing grocery
delivery platforms to support them in delivering the groceries. Last mile
delivery companies such as ShadowFax and Delhivery are partnering up with FMCG,
Retail Players and Grocery Shops to support delivery of essential products.
Restaurant chains with big fleets are partnering up with FMCG brands to supply
essential commodities. For example, Dominos India has partnered up with ITC to
deliver essential goods and groceries.
The potential lack of transparency on how the food is
prepared and notably lack of hygiene is the new concern of the customers in the
wake of the Global Pandemic. Therefore, hygiene has become the focus area for
aggregators such as Swiggy and Zomato. These companies are trying to adapt new
ways in order to overcome the sentiments of their customers regarding the
safety of the food being delivered to them. Also, the reasons to opt for online
food delivery services are indeed
plentiful since ordering groceries online reduces human interaction as opposed
to going to a supermarket or a corner shop, and for people living alone or
unable to cook for several reasons can get their food delivered at their
doorstep in these hard times.
Many aggregators are offering contactless delivery and one
such company Rebel Foods have introduced a live body temperature tracker on
their application. The Companies are suggesting the customers to transfer the
food to different utensils post delivery and to reheat the food before
consumption. Also, some of the companies have promised to give an online record
of the temperature logs of the food handlers such as the chef, food packers and
the delivery boys in order to be more transparent towards their customers. After the lockdown restrictions have been
lifted, Zomato is preparing for contactless dining by adding a new feature in
their application which allows the consumer to use the menu, place orders and
make payments online without coming in direct contact with any restaurant
staff.
Although a very slow recovery is expected by August end, the
demand for online delivery for the year 2020 will be nearly 50%-60% less than
the year 2019. The future trend of the Food and Beverage industry will be
health and hygiene centric. The restaurant industry will also take stringent
measures to ensure that both its staff and the food preparation follow the best
hygiene practices. The hygiene parameter will play a major role for the
consumers in order to decide whether to order out or dine out because of the
health scare around Covid-19. The night clubs and pubs will be worst affected
because of the social distance norms leading to decline in walk-ins into
restaurants. Majorly, the clubs and pubs will be focusing on online alcohol and
food delivery through the aggregators. Live Videos, Temperature Logs,
Contactless Delivery, focus on health & hygiene will result in increased
transparency in turn boosting customer confidence.
Conclusion
Due to Covid-19, the global pandemic, the Food and Beverage
industry is one of the worst hit industries because of which many small
restaurants and family-owned businesses will have to step into the online
delivery world. The businesses which were already providing online services
need to step-up their game by turning towards mainstream ordering apps and
providing more offers. The industry is forced to rethink their approach.
Industry experts have revealed that the business
volumes and revenues will suffer due to the health scare. However, they believe
that the businesses will take time to revive and we can expect the industry to
fall back to normal only by the first half of 2021. Till then the only way to
deal with the anticipated decline in the business is to maintain hygiene at
each level and intimate the consumers for every small or big step taken to
ensure their safety. Despite the anticipated set back, the online food delivery
market of India is expected to grow with a CAGR of 27.4% through the future
period of 2019-2025. 
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