FINANCE PROJECT REPORT

“ IMPACTS OF ONLINE FOOD DELIVERY

PLATFORMS ON RESTAURANT SALES ”

BY –
Nikhil Saini (21107008), Abhishek Tomar (21107007),
Sachin Singh (21107029), Yash Raj Singh (21107074) and
Mudransh Sethi (21107087)

2ND YEAR – MECHANICAL ENGINEERING

IMPACTS OF ONLINE FOOD DELIVERY PLATFORMS ON
RESTAURANT SALES
Nikhil Saini (21107008), Abhishek Tomar (21107007), Sachin Singh (21107029),
Yash Raj Singh (21107074) and Mudransh Sethi (21107087)

PUNJAB ENGINEERING COLLEGE, CHANDIGARH

Abstract
The E-Commerce industry in India is witnessing a record-high surge in online food delivery
and restaurant services. In the year 2020, the online food delivery industry or market was
worth more than $3 Billion. This was mainly due to the fact that the world was suffering from a
pandemic that we now call COVID-19. The food delivery industry is evolving and accelerated
significantly in 2020 as a result of the COVID-19 pandemic, which made dine-ins impossible.
The appeal of consumers to the approach of online food ordering is growing significantly,
which has changed the way many consumers and food businesses interact. The innovation of
online food delivery has given a whole new dimension to the lifestyle of millennials and their
food habits. The rapid growth of online food delivery services has disrupted the traditionally
offline restaurant industry. The studies on the impact of food delivery services on businesses
are critical because this market is expected to grow significantly in the coming years. The
main aim of this study is to analyze the impact of online food delivery firms on the sales of
restaurants.

1. Introduction

In this technologically advanced world, everyone is running in search of a better lifestyle, and
in search of this, our lifestyle has increasingly become stressful putting people always on the
move. But in this search for a so-called better lifestyle, we all forget the basic need of every
human being i.e. “Do Waqt ki Roti”, and people don’t even have time for this two times of
satisfactory meal. This is where the technological advancements kick in which has made it
possible for people having limited time at their disposal to even cook food for themselves, by
creating online food delivery platforms. This has been a revolutionary trend for the food
industry as it has become very convenient for everyone and has also contributed to saving time
for people. Slowly but steadily these platforms have become an integral part of the revenue
generation of local hotels and restaurants.

Technology has played a massive role in revolutionizing online food delivery service. It has
significantly contributed to bringing a change in the way a person wants to have his food. For
example, a person who is late for work can very conveniently skip breakfast and order food
directly from his office. This included the choice of having whatever the person wants with the
wide variety of options available at the click of his finger. These platforms are also prime
examples of e-commerce disrupting a traditional and nascent market. This flooding of new
delivery platforms has caused rapid growth in the total revenue of the industry. The overall
purpose of this study is to determine the effects that the entry of these platforms and their
subsequent diversification has had on restaurant sales by a comparative analysis of the sales
between offline and online mediums.

Nowadays the distance of your favorite restaurant does not matter anymore because the food
delivery apps have got all this covered. As stated by FORBES India the food delivery sector
saw an increase in revenue from approximately $109 billion to $114 billion in the last two
years subsequently the word dining out has been replaced by dining in, retail shopping has
been taken over by online stores and people no longer step out to even buy groceries. Also, the
reports say that the use of food delivery apps will show a continuous rise in the upcoming
years. With the extensive research done for this research paper statistics show that restaurants
that have tied up with food delivery apps have seen an increase in sales which has increased
even more after the pandemic. The discounts and offers provided by the food delivery apps
have made it pocket-friendly for people to order on an everyday basis. These apps provide not
only fast food but also healthier food options for fitness enthusiasts with schemes like inviting
your friends, the one who recommends gets an additional 20% cashback on his next order.

In this study we have reviewed the reports and research of some famous people and people
having adequate knowledge about the concerned industry, also we have used primary research
methodology as the basis of our research which included asking questions from several people
about their views on these online food delivery firms by generating a google form. Secondary
research methodology included comparing various data available on public forums and
analyzing them to get the results.

In the end we have come to a conclusion about the present scenario of demand for these
platforms and their future in the coming few years in India and the whole world.

2. Literature Review
● Recent studies conducted in the US have observed a pattern dubbed ‘cannibalization of
brick-and-mortar restaurant sales’ meaning as the dependency of a restaurant to drive
income increases on food delivery they notice a decrease in dine-in sales as the
customers realize the convenience. Also, the sales that had existed due to the
uniqueness of a specific local restaurant despite the market expansion die out to become
 online orders which are extremely low margin compared to dine-in sales due to the
convenience fee charged by these platforms. During COVID-19 these dependencies
increased due to the lockdown mandate which forced restaurants to move to such
platforms. (Jack Collison, Stanford University Research 2020)

● Recent study conducted by Amity University, Noida on Analysis of Online Food

Ordering (Anupriya saxena. Amity University, Noida 2020)
○ Applications in India concluded that attitudes towards online food ordering are
driven by the ease and usefulness of the online food ordering process. It’s also
driven by innovation in information technology, reliance on e-commerce
websites, and little outside influence. Due to this more people are preferring to
order online rather than moving out and eating at restaurants. This has
benefitted those restaurants that are listed on online food delivery platforms and
have increased their profit but those restaurants that are completely dependent
on offline sales have experienced losses as customers are preferring ordering
food to their homes.
○ It is also found that the main reasons for using these apps were to always have
the user's favorite foods ready on display and to always have access to the
internet and free data. It is believed that using an online food delivery system
will help your restaurant business grow from time to time and help your
restaurant facilitate a large-scale online business.
○ But some restaurant owners feel that online food delivery platforms sometimes
delay their delivery due to this their restaurant’s rating goes down which affects
their sales.
○ Generally Ordering food online is much more comfortable and less expensive
than dining out.
○ This research also shows that 71% of people think that the future of online food
delivery platforms is bright

● According to Jyotishman Das( 2018) in his research paper Consumer Perception

towards ‘Online food ordering and Delivery Services’: An empirical study, The mobile
application era has thrown open a new pathway for today’s marketing. The mobile
application combines marketing acumen and technology – uses the Internet for
advertising and selling services and goods.
○ Technology has played a key role in revolutionizing food delivery services.
Convenience is the prime factor for consumers, as placing an order is as simple
 as a few clicks on any mobile device. Technology has contributed to the
changes in consumer preferences as their dependency on technology has
motivated them to do everything online, including getting cooked meals
delivered to their doorstep.
Efficient systems can help improve the profitability and productivity of a restaurant. An
innovative device-based interface for customers to view, order, and navigate has
supported restaurants in managing orders from customers immediately.
○ The analytical data has these interpretations:
■ Factors that Encourage to opt for Online Food Delivery Services:
Doorstep Delivery and Ease & Convenience
■ Factors that Influence the Consumers to Choose Online Food Delivery
Services: Better Rewards & Cashbacks
■ Factors that Prevent Consumers from using the Services: Bad
Experiences in the past
○ The factor that encourages consumers the most is Doorstep Delivery, followed
by Ease & Convenience. Consumers are mainly influenced when they receive
any Rewards & Cashbacks followed by location.
○ The study is conducted to know how consumers perceive online food delivery
services. The perception of consumers may vary under different circumstances.
● In a study conducted by Dr Mitali Gupta, DAIMSR, it has been noticed that online
food delivery platforms receive additional customers from offices,malls etc as it is very
convenient to order it from your workplace and saves a lot of your time. It is interesting
to note that this study came out in December 2018 and of the pre covid times. A
research from the year 2016, has shown that the penetration of online food delivery
broke 30 percent in late 2016. This penetration rate has only increased in further years
to come with covid being the most primary factor in increasing the percentage by two-
folds. The increase in this percentage other than the covid factor is due to 3 factors:-

1. Easier menu

2. Hassle free

3. Less charge

Many such food apps have come in the market like food panda, Zomato and Swiggy
being the recent additions in the market. Zomato and Swiggy having origins in India
whereas food panda having it’s headquarters in Berlin, Germany. Zomato was founded
 by the name Foodiebay by founders Deepinder Goyal and Pankaj Chaddah in 2008. It
was a portal for restaurant recommendations. The company was renamed as Zomato in
2010. In the subsequent year,2011, zomato expanded to metropolitan cities like Delhi,
Mumbai etc, and as of 2019, it is in more than 24 countries and in more than 11,000
countries. Nowadays, restaurants have launched their own food apps other than the apps
that have dominated the marketplace. It is also mentioned in the research paper that
some apps don’t charge delivery charges. For example, Zomato, Fasoos, Dominos etc.

According to Dr Mitali Das(2018), Swiggy is funded by various investors including

Norwest Venture, Accel Partners and RB investments. The research paper further
mentions the benefits and negative effects of Online ordering on restaurants and how
they are impacting them and our lives

● As per "Charlene Li, Miranda Mirosa, and Phil Bremer," Numerous new business
models, including B2B, C2C, B2C, and O2O, have emerged as a result of the growth of
e-exponential commerce. Customers make purchases of products or services. The O2O
marketing strategy, which is based on information and communications technology,
allows customers to order products online and pick them up at a specified location. The
proliferation of smartphones and tablets, along with the creation of infrastructure to
support payment and delivery, has been one of the major contributors to the growth in
O2O commerce. We chose to include publications in both Chinese and English in our
analysis since China's online FD sector is the most developed and as a result, China's
online FD has attracted the most scholarly interest to far. Conventional restaurants with
a physical storefront suffered a fall in in-store dining and foot traffic as the popularity
of the online FD business grew as more and more individuals bought food online and
enjoyed it outside of the restaurant, either at home or at work. They came to the
conclusion that greater commission costs would lead restaurants to search for new
online FD platform providers, which might be challenging in markets where online FD
platforms have a virtual monopoly, or restaurants might decide to forgo online FD
entirely. There have also been allegations that small restaurants are subjected to
unreasonable costs by online FD sites, such as those that hold them or their delivery
personnel liable for reimbursements for delivery delays even when they were not at
fault. (Charlene Li, 2020)

● Since online food ordering services have only recently entered the Indian market, there
is little research on consumers' perceptions of this and other topics in the Indian
context. Due to technology, ideas, and innovation in the online food market, the Indian
 food sector is currently improving day by day. Customers are kept and their satisfaction
is increased as a result. It is evident that the restaurant industry and the food delivery
market have seen significant changes as a result of rapid urbanisation, technological
advancement, and consumer demand for novel food varieties. The argument that online
meal ordering is still gaining traction in India is because it has just recently made an
appearance. D. G. Shantashree Das (2019), Their study, "Influence of online food
delivery apps on the operations of traditional restaurants business," reveals that the
fundamental concept of the company is to deliver food to customers' doorsteps.
Restaurant aggregators utilise online meal delivery applications. There is a disconnect
between small-scale eateries and food aggregators' working methods, and a solution is
required to close this gap, address the issues, and enable small-scale eateries to thrive in
the online food market. According to (Gupta, 2019), customer comfort is simply the
most important factor. By allowing restaurant owners to show meal menus along with
dish names, images, specialties, and prices, this technology aids in growth.

● A wealth of academic research, particularly in relation to e-commerce, examines the

effects of introducing new sales channels. The research of prospective market
expansions and substitution impacts that online channels could introduce in traditional
markets is given particular attention. In this research, significant substitution effects
were discovered in a variety of industries, including newspapers, grocery stores, and
consumer electronics. Most research in this body of literature discuss how Internet-
based alternatives to conventional goods and services affect consumers. Computers and
electronic products are discovered to have relatively sensitive costs when purchased
online than offline. Craigslist's online presence decreased newspaper ads and even the
number of vacant homes and apartments. However, in the context of restaurants, the
impact of introducing online food delivery services is not as well understood. (Duch-
Brown et al. 2017; Wang, Song, and Yang 2013; Pozzi 2013; Gentzkow 2007)

● According to "N. Thamaraiselvan, G. R. Jayadevan, and K. S. Chandrasekar," the

"aggregator business model" has supplanted the old method of food delivery, in which
customers purchase food online from restaurant or fast-food chain websites. In their
study, they discovered that despite rising travel and Despite paying for vehicle
maintenance, some meal delivery services enjoyed profit margins of up to 30%.
Customers in India are accustomed to easy and transparent online buying through e-
commerce websites and digital applications, and they demand the same when it comes
to ordering food online. Demand has increased as a result of lifestyle changes,
particularly in metropolitan India. These changes include dual-income homes, a lack of
 meaningful family time, and changing eating preferences, for easy access to cooked
meals, especially fast food, at reasonable pricing. These major players recently joined
forces with an online food delivery service, anticipating a two-fold increase in orders
over the next few years. 2019 (N. Thamaraiselvan)

● Dr.S.C.B. Samuel Anbu Selvan and Susan Anita Andrew discussed the current state
of online food ordering. They anticipated growth in the Indian food technology sector.
Consumers are increasingly accustomed to buying and making purchases online
through Apps or websites as a result of the introduction of emerging technologies, the
restructuring of the service sector, and increased use of technology by service
providers. Lack of capital is another factor contributing to the demise of numerous
start-ups in the online food distribution industry. A recent poll found that more than
80% of food orders come from both online food distribution systems and India's top
five urban areas. Food brands all across the world are strengthening their connections to
food. Furthermore, delivery services for online food orders like Zomato are consistently
at odds with Swiggy.

In addition, the market for home-cooked food has not yet been fully investigated;
research should be done in this model because it is difficult to penetrate. For these
reasons, the Food Stack food delivery service has great potential because innovation
could take this brand-new concept in the food delivery industry in a different direction.

3. Need of the study

Given the rise in the use of delivery apps since covid which has proportionally increased
interest in funding of such companies. Given that such companies have an impact on
restaurants. Following are the specific changes that we have observed in recent years that we
are aiming to understand with this study.
● Understanding the rise of cloud kitchens:
Cloud kitchens are restaurants that fill orders exclusively for online orders and
have no dine in.
● Campaigns and law suits against such food delivery apps:
#logout campaign earlier in the month of July 2019 during which some 2000
small-sized hotels and restaurants delisted themselves from the delivery apps
and this was done as a response to the heavy discounting offered by the various
dining programs like that of Zomato, Swiggy etc. A lawsuit was filed by NRAI
 (national restaurant association of India) to CCI (Competition Commission of
India) against Zomato and swiggy for multiple anti-competitive practices
adopted by the aggregators that are negatively impacting restaurants.

4. Research Methodology
The research's focus is exploratory because it needs a lot of detailed information to examine the
connections between restaurants, online delivery partners, and clients. The research's goal is to
draw attention to the unethical business practices used by online meal delivery partners. To
support the research's title, the opinions of many professionals and business owners were
gathered. The questions in the questionnaire were too relative to concentrate on the negative
effects on profit and customer relations, therefore the author designed it to collect relative data.
This research reveals the dark side of the so-called business development module of the
internet food industry in order to raise awareness among new entrepreneurs and prepare them
for the challenges ahead.

4.1 Objectives of the study

The objectives of this study are stated as followed -
1. To study the positive/negative impact of online food delivery platforms on the sales of
local food businesses.
2. To study the different strategies adopted by various food delivery platforms to increase
their revenue and target audience.
3. To study and analyze the finances of restaurants before and after the advent of online
food delivery platforms.

4.2 Research Design

4.2.1 Scope of Study
The study is being conducted to better understand the effect of online food delivery apps on
restaurants and food outlets those who are registered and not registered both are included. The
study is conducted from the restaurant’s point of view. the benefits and drawbacks of
partnering with third-party for online food delivery services. The geographical scope of the
study is limited to the Tricity (Chandigarh, Mohali, Panchkula), India. This study also helps in
knowing the satisfaction level of the restaurants and food outlets on the basis of services
provided by online food delivery apps.
4.2.2 Sources of Data
Primary Data- https://forms.gle/A8pRVBoeb6KniXpY8
(Form also provided in Annexure)

● Sample Size- 70
● Sample Population- Majorly Youngsters of age 18-25 majorly of Tricity (Chandigarh,
Panchkula, Mohali). Still, respondents of other age groups are also considered
● Sampling Technique- Convenience Sampling
In the graph, we have represented the responses of people when they are asked about
their age. The major audience of our survey was 18- 25 with about 77.3 percent of the
total responses. The prime focus is on the 18-40 age group because they are considered
tech-savvy people who are able to use online food delivery platforms but other age
groups are also important to present the scenario of Dine out or their preference. We all
know how people have started using online platforms with exponential growth in India
in the last 5 years. Age is the major factor affecting the choices of people and this is the
only factor that can be used to differentiate between people.

● Questionnaire -
○ What is your age?
■ 17 or less
■ 18-25
■ 26-40
■ 40-60
■ 60+
○ How much do you spend one time eating out (delivery included)?
■ Less than 100 Rs per person
■ 100 - 200 Rs per person
■ 200 - 400 Rs per person
■ 400 - 600 Rs per person
■ More than 600 per person
○ What is your preferred way of dining?
■ Home Delivery
■ Dine Out
○ How often do you order food online?
 ■ Less than twice a month
■ 2 - 4 time a month
■ 5-10 times a month
■ 10+ times a month
○ How often do you dine out?
■ Less than twice a month
■ 2-4 times a month
■ 5-10 times a month
■ 10+ times a month
■ Less than 3 times a month
○ According to you, What is more expensive, dine-out or home delivery?
■ Dine out
■ Home Delivery
○ Do you think the offers and discounts on the delivery platforms are relevant, or
are they just a marketing gimmick?
■ Relevant
■ Marketing Gimmick
○ Suppose the discounts or offers of the delivery apps where not there. Will you
still order from them?
■ Yes
■ No
○ Do you think there is any difference in the quality of food when you consider
options of ordering online or dining out?
■ Yes
■ No
○ Rate the amount of Convenience or Satisfaction you get after ordering Food
Online.
■ Scale of 1 - 10
○ Lastly, would you like to mention one of your favorite Food Restaurants (like
Domino's, Mcdonald's, or any local restaurant ......)?

5. Secondary Data
Secondary data was collected from online available sources listed in the bibliography.
6. Analysis
6.1 Primary Data Analysis

Expenditure for eating out

To start the main question of the survey form, we would consider the capability of people to
spend money for eating from outside per month per person. The graph represents the Capacity
of expenditure. We can clearly see most of the people are in a cap of less than ₹200. This is a
really important graph for companies to place their products accordingly for the food market
i.e., restaurants or food delivery platforms have to place their products in the price range which
is most acceptable to sustainably grow in the market. To understand this we will further ask
questions accordingly to define this market.

Preference
The question asked to the people was, what was their preferred way of Dining, is it Home
Delivery or Dine Out? Though by not a large margin Home Delivery is favored by the
respondents the reason for the same would be asked in further questions in the survey. The
reason for this preference could be anything like the ease of access of the Home Delivery
option, the price of the food in both options, and the quality of the food. On further analysis
of the data, we can see that people between the ages of 18- 25 preferred mostly Home
delivery (67%) stating that the youngsters preferred the home delivery option and another age
group like less than 18 preferred Dine out (70%) similar situation arose for other age groups
like that of less than 18. The reasons for the same being that people aged between 18- 25
generally have a tight schedule which makes it difficult for them to ease out time for going
out for eating, other reasons can be their tech illiteracy which helps them easily order from
the ordering platform; etc. For further development of the case, more questions are asked.

Frequency between them

This section defines the frequency of ordering food from different platforms by the
respondents. These questions were asked to quantify the data and results that we got from Q3.
After quantifying we will further analyze data on the basis of the age of the people.
On the left-hand side, the data on the frequency of ordering food through Home delivery is
represented. From this, we can observe that the majority of people order less than 4 times a
month where 2-4 times and less than 2 times have a minute difference in response.

On the right side, the data of the frequency of people going Dining Out is represented. Most
people dine out less than 2 times a month approximately (50%). The frequency of people
going out is quite less when compared to Home Delivery.

Discounts
This Graph represents the Relevancy of offers or discounts offered by food delivery platforms,
as it can be seen that 70% of people think that all these are Marketing Gimmicks used to attract
customers. This question was asked if the price difference affects people’s preferences. This
will be further analyzed in the next question

Will people buy from food delivery platforms when no offers and discounts exist? 56% of
people would not buy from food delivery platforms if there were no offers, this is contradicting
the statement that most people think they are a marketing gimmick, somehow the companies
are successful in tricking people. Rest will not buy after the removal of offer which means
people are price sensitive.
Quality

Since people do not find differences in price or quality of the food because of the convenience
people increasingly prefer delivered food.

Satisfaction

● The above graph represents the data of how much satisfaction people get after ordering
food online. Is it hassle-free or complex? The data when further analyzed 80 percent of
 rating 8, 9, and 10 was given by the ages 18 – 40 years. Most people who rated less
than 8 were mostly above the age of 40 hence proving the above statements.
● The last question was rather primitive, asking Respondents about their favorite
Restaurant or Food chain. Though this can not be analyzed and cannot be a major part
of the research still it shows that the people in the age group 18 -25 years preferred
major international food chains over local restaurants.

6.2 Secondary Data Analysis

 The above graph shows us that the net revenue of Zomato has increased from 96 Cr in
the financial year 2014-2015 to a massive 4108 Cr in the financial year 2022-august,
2022 thus also indicating the trend for sales i.e. the sales are increasing year by year.
 Similar increasing graphs for sales are obtained for other food delivery platforms like
Swiggy etc. Companies like Swiggy, and Zomato have an average order per day of 1.5
million which is the main reason for their 4000cr revenue.
 Zomato and Swiggy accounted for nearly 2 million average orders per day in the year
2022. On festivals like New Year they clock over 9000 orders per minute.
 The number of monthly online visitors to Zomato’s website had grown from 35 million
in 2014 to 90 million in 2016.
 Research also shows that the target customers for online delivery platforms are of the
age groups from 17 to 35 years.
 Sudden increase in revenue from 2021 to 2022 is mainly due to covid restrictions on
dine-in services and due to quarantine people developed a nature of ordering food
online.
 The losses of online food delivery companies have also been increasing despite
increasing revenue. There is a rapid increase in the revenue from 2018 to 2019.
 Zomato has spread its business over 24 countries and Swiggy manages its business
across 8 countries.
 Swiggy has 128,000 registered restaurants on its platform whereas Zomato has 173,000
on its platform and more and more restaurants are being added to them due to an
increase in the number of people willing to order food online and preferring not to
choose dine-in facilities.
In 2018 Zomato started its services in 38 and in 2022, it has shown rapid growth and is
providing its services in 10000+ cities spread over 24 countries.
Swiggy operates in 500 cities in India.

AOV (average order value) for Zomato and Swiggy:

 The average order value keeps on increasing gradually. The reason for growth from
quarter 4, the financial year 2020 to quarter 1, the financial year 2021 was due to covid-
related restrictions. Factors that affect AOV include eating out frequency, discounts
offered by food delivery platforms, and ease of sitting and ordering food at home.
 People develop a habit of ordering food online and these companies give discounts on
large orders thus a person is generally tempted to order more. In 2022, the AOV for
Zomato and Swiggy was Rs. 400.
The number of monthly users of online food delivery platforms are increasing. It experienced a
downfall in between due to covid-restrictions but it kept on increasing later thus increasing the
sales.
  2 major companies Zomato and Swiggy account for almost 80% of market share of
Indian online food delivery business. Zomato accounts for 40% and Swiggy accounts
for 43% of net market share which gives tough competition to each other. Other
companies like Faasos, Pizza hut, Dominos etc account for 5% of market share.
 To increase the revenue, food delivery platforms are now offering dine-in facilities due
to which customers are able to reserve a table at their desired restaurant and order food
online and then eat at that restaurant.
 In the dine-out segment, the number of restaurant listings globally on Zomato had
grown from 1.2 million in September 2018 to 1.5 million in September 2019.

 In the 2nd quarter Fy. 2020, Dominos reported that online sales account to 87% of the
total sales. So dominos net revenue was Rs. 1,255.09 out of which Rs 163cr was from
offline sales.

 Some offline restaurants sales are decreasing and people are not willing to move out of
their house to eat as they can order food online.

 In Restaurants that offer both online and offline sales, like Mc. Donald’s, pizza hut etc
their most revenue is generated by online mode as they can cater to a large audience as
people from far distances can order.
Thus their main source of income is online delivery. Offline service accounts for only a small
fraction of their total revenue.

But this is not the case for all.

 Sales for offline food chains like Haldirams is increasing which depicts that more and
more people are going out to eat at places like Haldirams due to which their sales are
increasing and they are opening more offline restaurants.
  Fast food chains like WOW momos are also experiencing an increase in sales.
 Wow momos revenue in Financial year 2021 was Rs 220 crores and this increased to
Rs 450 cr till F.Y. 2022. It has a monthly revenue run-rate of over Rs 40 crore.

7. Implications
7.1 Effects of online food ordering on dine in Restaurants
There are both positive and negative effects of online food ordering platforms on dine in or
physical restaurants. First we’ll have a look at the positive effects.
1. If the service of the restaurant is good, it is a known fact that the customers will return
to order. This combined with a friendly user interface which makes things easier will
definitely attract customers and positive reviews.
2. People will never want to spend 8-10 minutes placing their order by directly calling the
restaurant and pause the work that they are doing. So instead they will order online
from the restaurant through various applications like Swiggy and Zomato etc.
3. During the rush hour or on weekends, the customer will avoid going to the restaurant
and place their order which eventually takes up more of their time, so they will directly
order online.
4. The food delivery platforms offer flexible payment options for the customers to look at.
5. Customers can real time track their orders and know exactly when the order will reach
them from the restaurants.
7.2 Negative Effects of Online food ordering on Restaurants
1. Online food ordering eats away the profits of the restaurants. The profit margins in
restaurants are very thin. The commission fee that the third party apps take from these
restaurants are excruciatingly higher than what it was in the pre covid times.
2. The food delivery third party app is the only source of communication between the
customer and the restaurant. The restaurant completely relies on the food app delivery
driver that the order will reach the customer safely. If there is any delay or the order is
wrong, the restaurant will be held responsible by the customer.
3. Dining at a restaurant is way better than being completely isolated and having food
alone by ordering it online.
4. The prices on the third party app can be extremely higher than what they are at the
restaurant because of the convenience fee and delivery charges that the app charges.
5. The food app often shows more of a glorified image of the food item that you think of
buying. When the order comes, the quality of the food can be low than what you
expected.

7.3 Impact on Revenue

1. Business works for the profit. All the operations be it food service or any other service
are meant to earn profit for the organization. Online delivery platforms when launched
were totally dependent on the food service outlets which were well established and
were well known in the city.
2. The delivery partners approached these outlets to tie up for the online delivery. The
restaurants were too blessed with the online food delivery concept, considering boom in
the business and the revenue. This was the trap for restaurants as well as for the
customers. Online partners now have penetrated the market and few of them have
created oligopoly in the market. Most of the food delivery apps/partners charge as much
as 30% of total food bill, this is nothing but narrowing restaurant’s profit and increasing
self-profit by such act.
3. Discounts which are offered in percentage later were made limited up to certain
amount. For example, Customer orders food online, he/she get 50% discount up to Rs.
100.This means even if customer order food worth Rs.1000, they get maximum
discount of Rs.100. At the same time food service provider will get only 50% of total
billing, at the same time customer is charged for delivery charges and restaurant is
charged as commission. In this case customer is getting very negligible benefit at the
 same time restaurant is working on very narrow profit. This is slowly crushing the
small businesses and resulting in food serving giants to grab the market.

8. Limitations
8.1 Primary Data Limitations
● Data gathered through google forms is limited to forms filled by the known of authors
involved which fall largely in the bracket of 18 - 24 and are not a precise representation
of the general population that use food delivery service apps.
● The data was gathered from customers instead of restaurant owners (due to certain
limitations) to gauge impacts of delivery platforms on restaurant sales.

8.2 Secondary Data Limitations

● Access to research papers was limited due to restricted access to platforms that provide
them.
● Delivery companies like Zomato and Swiggy were not listed at the time of research so
their data like sales, revenue, profit and loss were not available publicly. Data for
zomato and swig’gy before 2018 was not available.
● Offline sales of some restaurants was not completely available.

9. Conclusion

From the analysis above, we can conclude that the first advantage of online food delivery
platforms is the customer comfort and the second advantage is that these are helpful for
expanding business of restaurants who are enrolled in these online platforms as they are able to
attract more and more users by enabling them to see the menu of various restaurants online at
the same time. Integrating a online delivery system is beneficial for those restaurants who are
listed on the online delivery platforms. It is mainly because of their better on time delivery and
better discounts.
The revenue and sales of food delivery platforms is increasing significantly.
Online delivery applications and their partners want to become monopolies and increase their
profits. The food delivery partners present themselves as pillars of support for the
restaurant/food service enterprises, but it's possible that things aren't precisely as they seem.
Future food service establishments will have to rely only on food delivery partners for both
food delivery and reservations for meals. The food delivery partners will have complete
control, and there is a good likelihood that they will take advantage of the carefully thought-out
arrangement to increase their commission from the eateries.
Without a doubt, the food delivery partners have built a platform for small food enterprises, but
they also generate more income than true food service companies without having any physical
locations.
Food aggregators was a concept that grew as a result of the internet. Internet being able to
connect the world made it easier to use such apps. Now that you can order from anywhere
around the world, people do not feel the need to physically go and visit the place. Food
delivery apps ensure that the pick and deliver food from your favourite restaurants quickly.
Now midnight hunger cravings can be fixed with just a click. After analysing this survey, it
concluded that, restaurants preferred to be tied up with food aggregators as they bought more
customers and reduced their internal cost of delivery. Swiggy and Zomato are the main
competitors and they compete with each other by giving great offers to customers. Coupon
codes, cash back and complementary dishes are the main techniques of luring the customers.
Though some luxury food restaurants dint like the idea of being tied up with them, these
aggregators still captured a large market. The offer delivery from multiple food chains through
one app which makes it customer friendly and a time saver.
The likelihood of the author's future forecasts coming true is high because they are based on
the reality of the moment. To ensure that all parties involved receive a sizable share of the
revenues and profits generated by the online food delivery system, the regulatory authorities
must have control over its operation.

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11. Annexure