Food ordering and delivery platform Foodpanda is looking to invest Rs. 400 crores in its logistics division to further build its delivery operations along with its technology stacks. The company will be shelling out the capital over the course of the next 12 months to take on its cash rich rivals and regain lost ground in the market.
According to sources, the company plans to hire 25,000 delivery riders in the next 12 to 15 months to ensure a seamless user experience across the country. Along with improving the partner restaurants, users and rider experience, the investment will also be used to scale up their technology across all the metros and other key cities in the country. Speaking about the investment, in an official statement, Foodpanda India CEO Pranay Jivrajka said, “Creating a strong delivery ecosystem backed by technology is one of the most fundamental needs of the Indian food tech industry.”
Overall, the investment will help the foodtech company focus on creating transparent, more efficient and time saving procedures for delivery logistics. The company claims to have a presence in 130 towns and cities but will double down their focus on about 10 cities across which constitute about more than 50% of the overall orders received by the food delivery companies. Pranay Jivrajka further added their current plan is in line with their go to market strategy to make a difference in the food ordering experience of their restaurant partners, customers and riders. At present, Foodpanda offers menus from over 15,000 restaurants in India available on its app and website.
The food tech firm was acquired by homegrown cab aggregator Ola in December last year, with a commitment to infuse Rs. 1300 crores from parent ANI Technologies Pvt., Ltd. The all stock acquisition provided Ola with the opportunity to compete against global rival Uber, who also launched food delivery platform UberEATS.s
Currently, the food ordering and delivery industry is dominated by Zomato and Swiggy which are backed by big investors. Recently, Bengaluru based startup Swiggy also raised $100 million in a Series F funding round from Naspers.Meanwhile, Zomato also secured $300 million in funding from China’s ecommerce giant Alibaba.
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Amazon Pilots Food Retail Venture In Pune
Amazon becomes the first foreign firm to start a food retail venture Amazon Retail Pvt., Ltd., in India. Amazon Retail will start with its pilot services in Pune. The development comes at a time when the global retail giant Walmart is in plans to acquire a 40% stake in homegrown ecommerce giant Flipkart.
With this venture, Amazon India can stock and sell food items including sell locally made and packaged food directly to consumers. The Economic Times reported a person close to the development said, “Amazon is now a vendor on Amazon.in and is currently operating in Pune.” However, according to another source, it will take another quarter for the ecommerce major to roll out the food retailing business nationwide.
Amazon received the government’s approval to invest $ 500 million in Indian food retail industry in July last year. At present, Amazon is the only international company to have applied for the food only retailing business with 100% overseas investment. As mandated by the Indian government, Amazon will be keeping this venture separate from its online marketplace. This includes maintaining separate management and offices for the venture as the ecommerce firm does not have the permission to sell products directly to consumers. Without giving any details, an Amazon India spokesperson confirmed the news saying, “We continue to be on track to launch our food retail business in India.”
Other foreign funded retail outlets such as BigBasket, Grofers and Supr Daily have also received similar approvals from the government for food retailing. India’s food retailing sector seems to be the next big milestone in the ecommerce industry. Recently, China’s ecommerce giant Alibaba invested close to $300 million in BigBasket, while Walmart is also looking to buy a substantial stake in Flipkart. Till date, Amazon has invested $ 4.74 billion in India, almost reaching Jeff Bezos commitment to invest $ 5 billion in the country.
Will WhatsApp PayMent Change The Payment Industry In India?
After months of anticipation, WhatsApp, the online messaging service, officially has the payments app as a part of its features. The online messaging system rolled out this feature only to select users across the country and within the short time of its introduction, it has become one of the most popular features of this app.
However, this induction almost did not happen because of the company’s foreign origin. In fact, this was WhatsApp’s second attempt on this front. Last year, this messaging service had tried to partner with a private bank in the country to develop a digital wallet app to facilitate payments on its platform.
All was fine till the bank and WhatsApp went to the Reserve Bank of India. Multiple stakeholders of the Reserve Bank of India (RBI) was not ready to allow a foreign entity to enter India’s digital payments space. According to RBI guidelines, “Non bank entities applying for authorisation shall be a company incorporated in India and registered under the Companies Act 1956 / Companies Act 2013.”
WhatsApp is a Facebook owned company and Facebook is based in the United States. Ergo, this means this company could not directly enter the Indian online payments wallet. This was last year. What changed from then to now is the fact that Government actively started promoting the Unified Payments Interface (UPI) as part of its push to digitise India’s economy.
UPI allows for real time bank to bank transactions and once WhatsApp was sure this move was finalized, they jumped on the bandwagon. Facebook messenger service has had a decent run with the payments system and based on Facebook’s track record, the company decided to integrate this feature into WhatsApp as well. However, while this move came as a positive change for the messaging service, it brings to mind one important question.
Is this going to change the online payments game for banks and other companies? Is this service coming on board as a threat or as a new turn in the history of online payments? Consumer payments is a low margin game and is entirely defined by the scale of operations. On this front, WhatsApp has the potential to become a dominant game changer because of its base of 250 billion users all over the country.
Despite all its advantages, WhatsApp has one thing going against it. A little while after becoming live, the messaging service ran into a series of problems especially with Paytm raising a huge hue and cry about the safety of WhatsApp online payments. One bank which jumped on board with WhatsApp’s online payment feature is ICICI bank. India’s largest private sector bank was the first to team up with WhatsApp on this feature and it looks like the other banks are just minutes away.
With banks coming on board with WhatsApp’s new feature, it is interesting to see how two separate forces from different areas are coming together to create history for the first time. Clearly the times are changing and this move seems to be just one of those steps for an interesting future ahead.
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