Ride-hailing transactions fall behind food tech cos

In an indication that food tech is becoming more mainstream, platforms like Zomato, Swiggy and FreshMenu are seen to surpass ride-hailing platforms — Uber, Ola — in terms of transaction volumes. Despite the ride-hailing business having a head start, food tech platforms are having more transactions on a daily basis.

Data from consultant management firm RedSeer Consulting shows that in May, daily transaction volumes of food tech were about 1.4x — at around 3 million — compared to the 2.1 million that ride-hailing platforms saw.

Less than six months ago, the two sectors had transaction volumes of around 1.9 million each, the data added. “Increasing supply comes at a high cost for ride hailing, while food tech has low entry barriers, resulting in growth. In 2017, ride hailing was already witnessing 1.3 million daily transactions, whereas food tech had about 0.07 million,” said RedSeer Consulting foodtech expert Rohan Agarwal.

Analysts further add that with respect to consumption patterns, food tech sees more impulsive spending whereas ride hailing is still a necessity. “Besides, for ride hailing, consumers are down to predominantly two options —Ola and Uber — whereas food tech has more options and, hence, leading to many more transactions,” said Deloitte India partner Anil Talreja.

Another area of growth is through their penetration in tier-2 and -3 markets. Industry observers further add that Uber and Ola haven’t taken off in a big way in smaller cities where food tech platforms have a better reach. RedSeer’s data also adds that the share of non-metros has shot up 10% in comparison to 36% in Q4 of FY19 from 26% in Q3 of FY19 .

“Zomato and Swiggy have entered close to 200 cities, while ride-hailing apps have not been able to scale up in the same way. Besides, the demand is low, as there are other options for commute,” said Technopak chairman Arvind Singhal. However, going forward, the growth trajectories for both the verticals would come from diversification, add analysts.

Source:-https://retail.economictimes.indiatimes.com/news/food-entertainment/food-services/ride-hailing-transactions-fall-behind-food-tech-cos/70237802