Food delivery companies see demand spike from small towns


Online food delivery platforms have seen a spike in demand from tier 2 cities and onboarded more restaurants over the last two months, amid the second Covid-19 wave.

Restaurant aggregator Swiggy said tier 2 and tier 3 cities, including Tirupur, Jodhpur, Belgaum, Agartala and Jamshedpur, saw greater adoption of online food delivery.

Some tier 2 cities saw a 50% increase in users in the last month, while others “recorded their highest growth numbers to date”.

“Even after the first wave in 2020, these cities showed faster recovery, with many crossing pre-Covid-19 order values a few weeks after the movement restrictions were eased. One of the reasons for this was the migration of the working population back to their hometowns,” a spokesperson for Swiggy said.

During the first wave, food delivery order volumes dropped by 75% in March 2020 compared to January of that year, according to an expert who tracks the industry.

Zomato and Swiggy reported significant recovery in order volumes towards the end of last year.

According to the industry watcher cited above, food delivery companies were prepared to deal with lockdowns, and had Covid-safety protocols in place, unlike the first wave.

Reverse migration from metros helped friends and family in non-metro cities get acquainted with food ordering, which contributed to increased interest in these regions, the person said.

Food demand in tier 2 cities outstripped demand in metros over the last two months, said Raghav Joshi, chief executive India Business unit of Rebel Foods, which houses brands like Behrouz and Ovenstory across 340 cloud kitchens in more than 40 cities.

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“Tier 2 cities’ kitchens have grown really well and there is definitely a pent-up demand for premium brands,” Joshi said.

This has given Rebel Foods the confidence to add kitchens in Ludhiana, Bhubaneswar and Patna. Joshi said delivery demand overall has surpassed pre-Covid-19 levels in the last two months.

Rebel Food brands saw an overall growth of 25% in May over April, as consumers’ confidence in safety around food delivery returned.

Swiggy is currently ramping up hiring to meet increased demand in non-metro cities, its spokesperson added.

According to recruiting platform Teamlease, hiring by e-commerce, food delivery partners, and quick chain restaurants in non-metro cities shot up by 14% in the last two months, and has increased by 28% since March 2020.

Of the total restaurants onboarded on direct ordering platform Thrive, 75% were in non-metro cities including Kochi, Jammu and Dehradun, in the last two months.

The platform has expanded from 15-20 cities to over 100 cities since March this year, said cofounder and CEO Krishi Fagwani.

Swiggy has seen an average increase of 20% in the number of restaurants being onboarded monthly compared to the pre-Covid-19 period.

Thrive too has doubled deliveries and the number of restaurants onboarded since March this year, according to Fagwani.

Gurugram-based DotPe witnessed an increase in food delivery demand and restaurant onboarding in the last two months for single outlets, regional chains and eateries inside hotels that may have been on the fence about the delivery model.

“The second wave cemented for restaurants that delivery is here to stay,” said DotPe’s cofounder Anurag Gupta. “There has been a phenomenal focus on delivery,” he said.

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DotPe counts Google and the investment arm

— which has also backed Zomato — as its investors.

In the last two months, Thrive has onboarded restaurants from Marriott, Novotel, and the Leela group.

“I think the mindset has shifted there because they’ve also realised that they are sitting on that space, they need to start generating revenue out of it. They are coming on board now to get their own online ordering platform set up,” Fagwani said



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