App-Based Aggregators In Food Industry

Introduction
This industry has seen exponential growth in the past few years owing to its utility, ease of usage and
the current millennial lifestyle. The next unicorn is expected to be an app based aggregator from the
food and beverage industry.
• Swiggy- operational in over 9000 Indian cities, the app aims at bringing food from the best of
restaurants to the common people just on a click.

• Zomato- initially started off as a mobile app to find the nearest restaurants around you making use
of the Google maps and other smartphone technologies. . The app today lists over 42,000
restaurants and their menus with operations in over 23 countries.

• Fresh Menu- offers quality freshly cooked and packed food to its clients. Started by Rashmi Daga, a
vegetarian herself, the startup cooks, packs, as well as serve its own proprietary food. They employ
over 500 employees and have around 30 kitchens under them.

• Faasos-The food tech startup has registered its footprints in over 15 major cities in the country.
Faasos boasts of its own kitchens and well trained professional master chefs.
Porter’s Five Force Model
 Bargaining Power of Buyers
Porter’s Five Forces of buyer bargaining power refers to the
pressure consumers can exert on businesses to get them to provide
higher quality products, better customer service and lower prices. When
analyzing the bargaining power of buyers, conduct the
industry analysis from the perspective of the seller
The bargaining power of the buyers is low as:
• There are not many substitutes
• Buyers are large in number
• Low dependency on distributors
 Bargaining Power of Suppliers
• Here, the suppliers are restaurants
• Restaurants have the ability to partner with any of the major food
delivery services with fairly low switching costs.
• Hence, we conclude the power of suppliers to be Strong/High.
 Threat of Substitutes
Threat of Substitutes- When a new product or service meets a similar
customer needs in different ways, industry profitability suffers.
The threat of a substitute app based aggregator is high if it offers a value
proposition that is uniquely different from present offerings of the
industry.
 Threat of New Entrants
Barriers to entry is low, hence there threat of new entrants is huge.- In
order to sustain the competitive environment, the new entrant might
explore new verticals in the industry such as kitchens, etc., which the
already established app based aggregators haven’t.
 Rivalry Among Existing Competitors

The industry is chock-a-bloc with competitors—there are big brands such as

Zomato, uberEats and Swiggy and medium and smaller emerging brands, like
Tastykhana, Fasoos etc.
This high competition due to increasing number of food aggregators providing
equally competitive services with wide variety of choices. Hence we conclude
rivalry among existing competitors is high.
Porter’s Five Forces High/Low

Bargaining Power of Buyers Low

Bargaining Power of Suppliers High

Threat of Substitutes High

Threat of New Entrants High

Rivalry Among Existing Competitors High