On demand auto rickshaw aggregator Jugnoo forays into On demand food delivery business. According to a report by Medianama, Jugnoo food delivery is currently available in Noida, Gurgaon, Indore, Chandigarh and Jaipur. They are planning to launch ‘Menus’ across all Jugnoo locations in India in coming months.
Last year, Jugnoo too entered this space, through the launch of Meals, but it was a ready to eat meal delivery service. The customers can select hand-picked meal from their daily menu and the meal will be delivered to their doorstep. This service did not aggregate restaurants but rather served meals and tiffins sourced from different kitchens.
Apart from food delivery, Jugnoo also has a service called “Grocery”, an on-demand service to order items of daily grocery needs sourced from local wholesalers and is currently available in Chandigarh.
Medianama report includes that the new service Menus will aggregate restaurants including Burger King, Pizza Hut, Subway, Baskin Robins, Super Donut, Burger point, Rolla costa, Copper Chimney, Marky Momos, Dhaba.com among others.
Jugnoo is the first platform which tried to use their large network of autos for hyper local delivery service.
Jugnoo Menus service will be directly competing against food delivery services like Swiggy, Tinyowl, Zomato and many more.
Jugnoo was launched in November 2014 by Samar Singla and Chinmay Aggarwal. Having started from Chandigarh, Jugnoo is currently present in 40 cities across India. Apart from its core business of auto-rickshaw aggregation, the company has also expanded across other verticals of hyper-local logistics with its recently launched services like Fresh, Meals, Menus, Grocery and Jugnoo Delivery.
Headquartered in Chandigarh, the company is currently rendering its services in 40 cities of India and trending at 40,000 daily transactions. It has over 12,000 autos empanelled under the brand now.
The customer has the convenience of using Paytm, Mobikwik and UPI based payment system to pay for the services offered by Jugnoo.
Taxi aggregator Ola has shut down Ola café (food delivery service) within the first year of its launch. Ola also had their own grocery delivery service which was shut down soon after its launch. As per a news report in Livemint, Ola café failed to meet the expectations as they faced stiff competition from other food delivery businesses like Swiggy, Zomato, Tinyowl. Ola’s cab drivers used to collect food from the partner restaurants and drove around, delivering whenever there was an order from a nearby locality. Jugnoo meal and menus services will be in the same manner.
Online Food Delivery Market in India
According to a report by Kotak Institutional Equities, though the total food delivery and takeaway market in India was pegged at $12.8 billion in 2014, the online food delivery market size is only around $95 million at about 0.7 per cent penetration. “Despite the visible popularity of online food ordering, we reckon only 27 per cent of the 40 million online shoppers are ordering food online,’’ the report said.
While we have seen few shut downs in this space last year, all the major companies operating in food delivery is facing heavy cash burn and losses year after year. Last year Swiggy posted 65 fold increase in losses for the fiscal year ended March 2016. Consumer internet start-ups usually burn cash in their early years to achieve scale. This is done mainly to lure customer through heavy discounts and offers.
Read more: Top Online Grocery apps in India
Uber has started food delivery business in India with Uber Eats, they are yet to lauch such a service in India. Even though India is an important market for Uber, food delivery has turned out to be a challenging business in India.
Some food tech start-ups such as Dazo, Eatlo, Tinyowl shut shop, while others were acquired. Hyper local delivery startup Grofers acquired Spoonjoy.
Even though food start-ups are facing challenges especially in delivery costs and incentives, Indian food delivery space looks exciting. Since more number of internet users are transacting online and these food delivery start-ups offer more options for the lazy and busy Indian youth, profit numbers are not a distant dream. Hope 2017 will be the year for food delivery start-ups of India.
Have you tried ordering food online. If Yes, what is your take on this space? Please provide your comments below.