Industry Insights: Understanding the food delivery industry | The Daily Star
12:00 AM, August 02, 2019 / LAST MODIFIED: 12:09 AM, August 02, 2019

Industry Insights: Understanding the food delivery industry

The growing trend of food delivery in Bangladesh opens up new doors of comfort to consumers. What was once a huge hassle for some and a luxury for others, is now a common trend. As with any industry with growth potential, barriers exist and as consumers, we must be aware of the barriers that these companies are fighting to knock down every day. So what are the biggest barriers that ail companies like HungryNaki, Foodpanda, ShohozFood etc?

High cost per meal

Restaurants often have to cover huge startup costs to get a return on investment. This leads to them trying to make a large profit from every item they sell, resulting in hefty markup on the simplest items. Many restaurants suffer from supply chain issues that extensively increase the costs of sourcing ingredients. Naturally, due to such issues, the price of the finished dish goes up. The 15% VAT that many restaurants are bound to charge doesn’t help either, making the final bill all the more expensive. How does this relate to the food delivery companies? The high price discourages orders. Adding to that, people’s orders are mostly limited to hangouts and special occasions. It is true that people sometimes order food out of intense craving, but the number of people that use food delivery systems as a go-to solution for food is limited because the cost of food is too high. People find it much cheaper to eat at home. For this industry to sustainably excel, the cost of restaurant-cooked food must be minimally different from home cooked food.

Poor quality control

It will be incorrect to say that cheap food doesn’t exist. The vast majority of people do rely upon the food from street stalls. However, companies can’t rely on these places due to a lack of quality assurance. If we eat at a hotel ourselves and the food is stale, we can do something about it instantly, and for a lot of us, it means to subserviently accept the substandard nature of such food and move on with our sad, unpleasant lives. However, getting such food delivered at our doorstep would prompt us to go off on the company that delivered such food and give it back to them. The company can’t charge you for it, neither can the restaurant undo the food they created. These places are also unwilling to pay commission to the delivery companies, making it harder to generate revenue. Pathao has tried dealing with this issue, and while they have been successful in introducing them into the market, sustenance is still a huge concern. Not to mention, the food isn’t perceived to be healthy enough to be had daily, which does not allow it to be ordered daily.

Inefficient food preparation systems

Most countries with developed food delivery practices have restaurants that have dedicated systems just to deal with delivery orders. It is important to reduce the preparation time when we consider the additional delivery time added. Bangladeshi restaurants often suffer from poor service time in general. Add a long delivery time with it and you get what looks and feels like an absolute disaster. It is also worth noting that the packaging of food is treated with very little regard. This makes it significantly harder for the delivery men to arrive at our doorstep with warm food. The science behind apt food packaging is often inaccessible and hence not undertaken by most restaurants.

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