India’s Challenging Food Market
The food market in India has high potential as it is everyone’s primary need and people rarely hesitate while spending on food. Indian food market enjoys overall growing with the good margin of 11% to reach $100 billion in sales in 2015. In 2015, a lot of new startups entered into the food sector with an investment of nearly 235.66$ millions, but most of them turn backside with the same speed as they entered. Most of the new entrants wow their customers by providing deep discounts, which obviously turn out to be painful for the other small offline sellers. How long can you survive in the market by providing a product in Rs50 whose original cost is Rs 55? They underestimate the business as food sector needs a thorough study of understanding the nature, taste and need of the customer.
Out of 100% share of the food market in India, full service restaurants, enjoy 57% also they provide high quality of food compared with fast food outlets and street stalls. Fast food market also got a 16 % share and still street stalls give them a tough competition with 15% share in a total market.
Selling food online is totally different from selling clothes or electronics online, the reason is time. People can wait for clothes or other accessories for one or two days, but they want food in half an hour like lunch at lunch time and dinner at dinner time, so logistics is one of the biggest challenge and also the quality of the food you provide matters a lot here. You may not play with a single menu chart all over the country, taste changes with the change in location, food market have to provide innovative food also to generate the spenders’ interest towards them.
To sustain in the business for a long term, companies have to find some other ways to bind their customers to them instead of discounts, solely depend on discounts take your business on shut down mode very soon. Reading the market, checking the history of the people you want to serve, finding out the challenging points and deriving their solutions are some of the options you have in this tough section.(data source ET)