Food delivery fight grips small-town India

Bengaluru: Four months ago, it was a homecoming of sorts for 25-year-old Ankush Mohanrao. HT image “The two players know that there is a demand in smaller towns, and this aggressive expansion is a race to simply tap into that demand,” said Arpan Sheth, a partner at consulting firm Bain and Co. “The business model is definitely viable in smaller towns and cities where the population is around 1 lakh but its sustainability beyond that is to be seen.” While the expansion has led to job creation, a proliferation of restaurants, and increased ease in getting home delivery of food in smaller towns, the push comes with its own set of unique Indian challenges—supply constraints, infrastructure, and culture, among other things. “So, what platforms like Swiggy do in small towns and cities is that they partner with local brands, exclusively through Swiggy Access, which provides 10-12 kitchens a cooking space under one roof.” This is the playbook Swiggy has followed in metros as well, but experts tracking the food tech space believe that this will work better in smaller towns due to low competition. Given the pace of growth, “we expect these cities to constitute more than half of the order volume by the end of the year”, said Mohit Gupta, chief executive of food delivery at Zomato. “As more and more smaller towns urbanize, we’re seeing exponential growth in these cities—several of these tried food delivery for the first time on Uber Eats,” said Bhavik Rathod, head of Uber Eats.