Just Eat's acquisition helps Foodpanda eliminate competition in the market, says Rohit Chadda

In its second acquisition in a span of three months, online food delivery platform Foodpanda has bought the Indian arm of its competitor, Just Eat, for an undisclosed amount.

The company had bought its Indian rival, TastyKhana, in November last year. With the Just Eat acquisition, Foodpanda will now be present in 200 cities, says Rohit Chadda, Co-Founder and Managing Director, Foodpanda India, adding that the move would help the brand cement its leadership position in the country. Edited excerpts from an interview with BT's Arpita Mukherjee.

Q. What does the acquisition of Just Eat bring to you?

A. Just Eat has a very strong presence in the south of India. And while we were already the biggest food delivery platform in the country, we have further consolidated our position as leader in the category. It's a move that helps us eliminate any competition in the market. There is no other national competitor. There are local players that keep coming up, or keep shutting down.

Q. What is driving the food delivery market in India?

A. The demographics of the population are changing. You see new satellite cities coming up and you see a change in the lifestyle of people. There is the migrant population where people are either living alone or with friends and are not used to cooking, and the change in the working culture with longer work hours. The culture of dining out is not moving as strongly as the delivery market.

Also when you compare dining out to eating in in terms of costs, eating in is much more cost effective and is about a 15-20 per cent saving for somebody ordering delivery rather than dining out at the same restaurant. While organised food retail is growing at 20 per cent, the delivery market is growing at around 40 per cent. And you also see a surge in the QSR (quick service restaurants) companies that are coming in. A lot of international players are coming in. There are also players such as Box8 that are trying to capitalise on the food delivery market. You also see the Johnny Rockets and Burger Kings of the world trying to take a share of the fast growing delivery market.

Q. How is the Indian market different?

A. Every market has its own flavour. You obviously have to modify the model and the execution according to the market. For us what has worked is very strong customer focus, customer experience… We make sure that we focus on technology very strongly and ensure that there is minimal manual intervention. We use technology wherever possible.

Q. What are the issues that you're currently looking to solve in India?

A. Initially we saw that there was no internet penetration and there was a lot of fragmentation in the food delivery restaurant space. We had to educate the restaurant owners how delivery is an equally important part of the food business. When you're eating at home, your delivery time and packaging are extremely important.  

We have at times helped them with delivery material; taught them expertise about delivery. Also using the method of delisting restaurants that are not performing to the best standards. We've also been working very closely to introduce technology to their system where we saw the need and the potential. We've put our own proprietary hardware and software where we  see the need.