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India to be the new hub for virtual restaurants



We are in the midst of fast-paced, digital era where the trend from outdoor dining is changing to ordering food online. There is a massive shift in the Indian Consumers’ buying behaviour as we are dependent on technology for almost everything these days. The Food and Beverage industry is no exception as technology has lent a new face to the industry by the rise of ghost restaurants or virtual kitchens, ones that do not have a physical presence to offer the eaters a place to dine-in but only specialize in delivery services. One after the other, new innovative trends have been coming to the fore, putting the industry on the path of continuous advancement.

Well, the surmounting demand for online-food delivery in the country has been one of the prime reasons behind the emergence of this novel trend. Besides this, the confluence of multiple other factors like younger age groups becoming tech-savvy, a rise in the number of mobile applications, growing influence of these apps on the Indian population (especially the millennial population), etc. has also contributed towards the establishment and success of these most special virtual restaurants in the country.

Well, numerous studies conducted over the past few months have revealed that the Indian consumer is now more comfortable in ordering food online and relishing their meals indoors, clearly surpassing the trend of restaurant dining. According to a report by Redseer Consulting, India’s online food ordering sector has been growing at 15% every quarter. And these numbers have only been setting a new benchmark each day, indicating a strong change in the way how people perceive a restaurant to be.

The concept of virtual restaurants has taken off pretty well in the country, especially in the metropolitan cities, where people are usually more tech-savvy and have a busy urban routine and lifestyle. Ordering food online works best for them, as it saves them from the hassle of preparing meals themselves. The virtual restaurant ecosystem registered an astounding growth rate of over 50% during the period of November 2017 – January 2018, while online payments grew by more than 90% during the same period. Quite certainly, these new types of food delivery establishments are increasing in popularity, as more and more restaurateurs bid adieu to the traditional brick-and-mortar concept and instead, focus on delivery.

Among the host of ghost restaurants which have made a mark in the country, some of the leading names are Box8, Curry Me Up, Kadhai House, Pan of Asia, among others. As these players toy with a fairly new concept, innovation becomes their main forte, using which they have to ride on so many aspects like maintaining superior quality & packaging, hygiene, creative menu, shorter delivery times apart from maintaining lower costs. Usually, these virtual players collaborate with the third party delivery apps and also the leading restaurant search and discovery apps like Zomato and Swiggy, which helps them reach out to a larger audience and in turn, draw more customers. As a result, these platforms are fast becoming overcrowded marketplaces, offering the consumer the widest range of eateries and the widest range of menu items to choose items. This further opens gates for another industry which is the logistics and supply chain industry, 13% of world’s GDP is spent on logistics and this can be minimised and a consumer friendly model can be implemented through which we can achieve higher delivery happiness scores. The whole idea of ghost restaurants is dependent on logistics, and if the last mile delivery isn’t properly synchronised, the growth of virtual kitchens will surely move down the hill. Therefore, there is scope for third party applications to collaborate with IoT enabled technological platforms to enhance the last leg of delivery in order to increase consumer satisfaction and convenience at the same time.

For the new-age entrepreneurs who are essentially bootstrapped and have been exploring newer ways to dive into the sector, virtual restaurants are an excellent opportunity, as the investment involved is usually small and the expensive items that are required in case of setting up a physical food outlet do not apply here. In fact, the delivery-only sector has been drawing a huge amount of investor interest lately, where we foresee a lot of VC money being pumped in and flowing in the sector.

Having said this, the concept of these faceless restaurants is at a fairly preliminary stage in India, but the trend is expected to pick up pace, as technology continues to make deeper inroads and more and more people start getting comfortable with the usage of mobile apps. The Indian food industry would always witness an increased demand, where there is tremendous room for innovation and newer ideas; virtual restaurants are definitely going to open a new chapter in the industry.

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