India's top food chains like Oh! Calcutta, Mainland China bet on home deliveries to keep cash registers ringing
Some of India's top sit down eateries are building on the wisdom of fast-food chains, saying bon appetit at the doorstep of patrons who are cutting expenses by eating out less.
Although home delivery of food is part of the services offered by family restaurants, it's over the last 15 months that these eating joints have started sprucing up their systems to keep cash registers ringing. Experts say home deliveries for full-service restaurants in India are growing at 25-30% year-on-year.
The latest to jump onto this bandwagon are fine-dining chains Oh! Calcutta and Mainland China. Home delivery offers 5-6% higher net margins, said their owner Anjan Chatterjee, who has hired a logistics head and is outsourcing delivery backend.
"We didn't particularly encourage delivery earlier as the experience at our restaurants was important, but now people want more delivery, as they don't want to go out to eat in this market environment," Chatterjee said, adding he expects the share of home delivery in his business to rise from 2% now to over 10% in six months.
For Bercos, a Delhi-based Chinese restaurant chain, home deliveries account for 20% of business, double of what it was a year ago. "We are now looking at setting up smaller 50-seater restaurants with bigger delivery operations," said managing director Kabir Advani. Home deliveries have become popular in Saket, Connaught Place and Janakpuri areas of the city and the satellite towns of Gurgaon and Noida, he said.
Growth of full-service restaurants, generally considered a barometer of economic health of a nation, has slowed in India from an annual 25% to about 15% in the last two years. It, however, remains the fastest growing part of the country's hospitality sector.
Experts say changing lifestyles, issues around travelling and the overall slowdown in the economy have aided growth of the food delivery business in the country.
In India, restaurateurs' focus on the home delivery segment sharpened after the 2010 successful public offer of shares by Jubilant FoodWorksBSE 0.60 %, which runs the Dominos Pizza chain in the country.
"There is an increased awareness among restaurateurs that they can improve capacity utilisation by doing deliveries," said Samir Kuckreja, president of the National Restaurant Association of India.
Oriental Cuisines' Wangs Kitchen, which has outlets in Chennai, Bengaluru, Kolkata and Hyderabad, has a dedicated call centre and gets 40% of its business from home delivery. "Business from deliveries has almost doubled over the last two years. We found this was an untapped potential in the market," said Narendra Malhotra, its chief executive.
Chatterjee's Speciality Restaurants, which runs Oh! Calcutta and Mainland China, plans to tie up with a local search service to provide backend-calling support for its delivery operations. "We are also setting aside 50 sq ft of space in each of our kitchens that will be dedicated to delivery," said Chatterjee.
For Pan India Food Solutions, which runs Spaghetti Kitchen and Noodle Bar and has exclusive rights for the Copper Chimney brand, home deliveries account for almost 15% of its restaurants' business. The company has introduced a lower-priced menu for home deliveries.
"The average bill for deliveries is about 30% lower compared with that for dine-in guests, as there are no beverages," said Jaspal Singh Sabharwal, partner,Everstone Capital, which has an investment in Pan India Food Solutions. "It's a more efficient use of fixed cost for a restaurant, which improves return on investment, especially in this market environment."
Sales through this route have also shot up for Sagar Ratna. The south IndianBSE -0.40 % food chain, which till about two years back had shown little interest in home deliveries, said deliveries account for almost a fourth of its business, up from 14% earlier.
Source : RAVI TEJA SHARMA,ET BUREAU
changing lifestyles, issues around travelling and the overall slowdown in the economy have aided growth of the food delivery business in the country.
Although home delivery of food is part of the services offered by family restaurants, it's over the last 15 months that these eating joints have started sprucing up their systems to keep cash registers ringing. Experts say home deliveries for full-service restaurants in India are growing at 25-30% year-on-year.
The latest to jump onto this bandwagon are fine-dining chains Oh! Calcutta and Mainland China. Home delivery offers 5-6% higher net margins, said their owner Anjan Chatterjee, who has hired a logistics head and is outsourcing delivery backend.
"We didn't particularly encourage delivery earlier as the experience at our restaurants was important, but now people want more delivery, as they don't want to go out to eat in this market environment," Chatterjee said, adding he expects the share of home delivery in his business to rise from 2% now to over 10% in six months.
For Bercos, a Delhi-based Chinese restaurant chain, home deliveries account for 20% of business, double of what it was a year ago. "We are now looking at setting up smaller 50-seater restaurants with bigger delivery operations," said managing director Kabir Advani. Home deliveries have become popular in Saket, Connaught Place and Janakpuri areas of the city and the satellite towns of Gurgaon and Noida, he said.
Growth of full-service restaurants, generally considered a barometer of economic health of a nation, has slowed in India from an annual 25% to about 15% in the last two years. It, however, remains the fastest growing part of the country's hospitality sector.
Experts say changing lifestyles, issues around travelling and the overall slowdown in the economy have aided growth of the food delivery business in the country.
In India, restaurateurs' focus on the home delivery segment sharpened after the 2010 successful public offer of shares by Jubilant FoodWorksBSE 0.60 %, which runs the Dominos Pizza chain in the country.
"There is an increased awareness among restaurateurs that they can improve capacity utilisation by doing deliveries," said Samir Kuckreja, president of the National Restaurant Association of India.
Oriental Cuisines' Wangs Kitchen, which has outlets in Chennai, Bengaluru, Kolkata and Hyderabad, has a dedicated call centre and gets 40% of its business from home delivery. "Business from deliveries has almost doubled over the last two years. We found this was an untapped potential in the market," said Narendra Malhotra, its chief executive.
Chatterjee's Speciality Restaurants, which runs Oh! Calcutta and Mainland China, plans to tie up with a local search service to provide backend-calling support for its delivery operations. "We are also setting aside 50 sq ft of space in each of our kitchens that will be dedicated to delivery," said Chatterjee.
For Pan India Food Solutions, which runs Spaghetti Kitchen and Noodle Bar and has exclusive rights for the Copper Chimney brand, home deliveries account for almost 15% of its restaurants' business. The company has introduced a lower-priced menu for home deliveries.
"The average bill for deliveries is about 30% lower compared with that for dine-in guests, as there are no beverages," said Jaspal Singh Sabharwal, partner,Everstone Capital, which has an investment in Pan India Food Solutions. "It's a more efficient use of fixed cost for a restaurant, which improves return on investment, especially in this market environment."
Sales through this route have also shot up for Sagar Ratna. The south IndianBSE -0.40 % food chain, which till about two years back had shown little interest in home deliveries, said deliveries account for almost a fourth of its business, up from 14% earlier.
Source : RAVI TEJA SHARMA,ET BUREAU
