DR.

RAM MANOHAR LOHIYA NATIONAL

LAW UNIVERSITY, LUCKNOW
2018 – 2019

ECONOMICS
TITLE OF THE PROJECT:

THE IMPACT OF ONLINE FOOD MARKET ON RESTAURANT BUSINESS

SUBMITED BY: UNDER THE GUIDANCEOF:

HARIANK GUPTA Dr. Mitali Tiwari
Enrollment No.–180101053 Assistant Professor (Economics)
B.A.LL.B. (Hons.) - III Semester RMLNLU

ACKNOWLEDGEMENT
I would like to use this opportunity to extend my heartiest gratitude to all the people who
have helped me develop this project.
First and foremost, I would thank my Economics professor, Dr. Mitali Tiwari, who has been
constantly supporting me, guiding me and helping me with all my queries and difficulties
regarding this project since its fledgling stage. Without his enthusiasm, inspiration, and
efforts to explain even the toughest of jargons in the most lucid manner, the successful
inception of this project would have been a Herculean task.
Next, I would like thank the librarians of Dr. Madhu Limaye library for helping me find the
correct resources for my research and for helping me enrich my knowledge.
Finally, I would like to extend my gratitude to my batch mates and seniors for providing me
some unique ideas and insights which helped me make this project even better.
I know that despite my sincerest efforts some discrepancies might have crept in, I hope and
believe that I would be pardoned for the same.
Thanking You
Hariank Gupta
Date:
_________
 TABLE OF CONTENT

Table of Contents

LAYOUT OF THE RESEARCH.......................................................................................4

PROBLEM STATEMENT:................................................................................................4

RESEARCH OBJECTIVES:..............................................................................................4

RESEARCH METHODOLOGY:......................................................................................4

SCOPE OF RESEARCH:...................................................................................................4

AREA OF RESEARCH:.....................................................................................................4

RESEARCH DESIGN:........................................................................................................4

LIMITATIONS OF THE STUDY:....................................................................................4

LITERATURE REVIEW.........................................................................................................5

INTRODUCTION.....................................................................................................................6

ANALYSIS AND EVALUATION OF THE DATA.................................................................7

Analysis of questions asked from the customers.....................................................................7

Analysis of questions asked from the Restaurants................................................................14

CONCLUSION.......................................................................................................................22

ANNEXURE 1........................................................................................................................23

ANNEXURE 2........................................................................................................................25

REFERENCES.......................................................................................................................27
 LAYOUT OF THE RESEARCH

PROBLEM STATEMENT:
This paper attempts to find the Impact of Online Food Marketing on the restaurant business.

RESEARCH OBJECTIVES:
1. To study the consumer choice and preference toward Online Food Applications.
2. To study the impact of online food applications on the restaurants
3. To study the impact of offers rolled out by the restaurants on food applications as well
as restaurants.
4. To study the usage and impact of Zomato Gold on Consumers and restaurants

RESEARCH METHODOLOGY:
The method of survey through questionnaire has been adopted to meet the research
objectives.

SCOPE OF RESEARCH:
The survey is conducted on 110 people and 4 restaurants. The target population is from
Aashiana, Lucknow. The conclusions drawn will be based on the responses given by the
consumers. This study will be helpful in getting an understanding of impact of online food
market on the restaurant business.

AREA OF RESEARCH:
The respondents are chosen from Ashiana, Lucknow for this research study.

RESEARCH DESIGN:
SURVEY RESPONSE ANALYSIS & CONCLUSION
COMPARISON

LIMITATIONS OF THE STUDY:

The first limitation is that the population on which the survey was conducted represents the
opinion of a limited area. It is not representative of the responses of the entire population. The
restaurants covered are only 4 due to the non availability of the required tools to conduct a
survey on a large scale.
 LITERATURE REVIEW

A research on the changing market for food delivery (Carsten Hirschberg et al 2016)
indicates that online’s penetration of the total food-delivery market broke 30 percent in 2016.
We believe penetration rates will grow further as the market matures, eventually reaching 65
percent per year. According to gloria food the advantage of online ordering and the reasons
for the growth of food delivery app industry are Convenience, Simpler menu to manage,
significant savings, no Hassels etc. Food Panda is an introduction to the newest food
sensation that’s here to stay (Shiyin Chan, 2015) Foodpanda is a global online food delivery
marketplace headquartered in Berlin, Germany. Fun fact - they’re also known as hellofood in
other places in the world.

Bhavna Singh (2015) said that Foodpanda has been present in the Indian market since May
2012. Foodpanda first major move was acquisition of TastyKhana, which was launched in the
city of Pune in 2007. Together with TastyKhana and JUST EAT, it is now present in over
200 cities and partners with over 12,000 restaurants. She also talked about JUST EAT was
launched in Denmark in 2001 and was traded publicly on the London Stock Exchange. Their
Indian business was launched as Hungry Bangalore in 2006. It was renamed in 2011 when
JUST EAT acquired a majority share in the business. Today, the company partners with over
2,000 restaurants.

According to Deepinder Goyal, Zomato CEO and co-founder told TechCrunch that he
expects to reach 10,000 restaurants in India in a few months. “We have a sales team of
around 300 in India and 5,000-odd advertisers... these partners know the volume we bring to
them so it is quite easy for us to launch this new service.”
 INTRODUCTION

The food ordering mobile apps are easy to use and offers high convenience with time and
effort saving for the customers. This has encouraged more users to use the mobile apps and
order their favourite food online, to get them delivered to their houses. The UI/UX of these
apps, along with the ease of navigability and efficient search options enhances the
convenience of the food ordering apps.
The food ordering mobile apps offer flexible payment options for the customers to be able to
pay using various modes of payments, best suitable for them. The integration of various
popular payment gateways offers flexibility and cashless transactions to the customers, thus
encouraging them to use the food delivery app.

The food ordering software is equipped with real time GPS tracking systems, such that the
customers can track the delivery boy bringing their food, along with helping the delivery
boys to track down the exact address of the customers.Online food ordering often offer
loyalty points to the customers for encouraging them to use the mobile app even more often.
These loyalty points can be used by the customers to place future orders, thus helping them to
use the app more often.
With 24/7 customer support facilities, the mobile apps can offer the best customer supports,
answering to their queries and assisting them in any need or complaints. Customer support
has effectively become even more efficient, since the customers can connect to the
executives, with just a few clicks on their apps.
 ANALYSIS AND EVALUATION OF THE DATA

Analysis of questions asked from the customers

Figure 1

It can be seen that about 68.2% of the people prefer ordering food online. And only 30.9% of
the people of the target population prefer going to the restaurant. And only 1% of the people
prefer ordering food directly by calling the restaurant.

So we can see that majority prefer the online food marketing option which implies that
people want more comfort from home and don’t want to go outside.

Figure 2

By analyzing the responses it can be seen that people find it very convenient, easier. They
think that it is less costly as compared to the dining out. They also consider it as less time
taking as the responses that the students gave was that they saved lot of time during
examinations. They also considered that they didn’t have to go outside to have the food as
they are getting the food at their doorsteps. Some of the people considered that they get lots
of option while they order online as there is lot of time before they place the order.

Figure 3

It can be seen by the responses that 54.6% parents know about the food applications but don’t
order food online and prefer dine out. 31.8% of parents know about the application and use
the application. 11.8% parents don’t even know about the applications. 1% of the parents
know about the online food applications but want to eat inside the house by cooking in home.

Most of the Parents know about the online food applications but don’t want to order from
them online food applications may be because they don’t consider it safe or they might not be
knowing that it is cheaper than dine-out. But some parents know about the service and use the
application because they might be knowing that the food offered online is cheaper in cost and
can be availed at home without going outside. However, some parents don’t know about the
applications, so these parents may not be from urban area as in the urban area there is lot of
advertisement by these Online Food Application Applications.
 Figure 4

It can be seen that 82.7% people prefer giving treat to friend outside in restaurant and only
17.3% people prefer ordering food online.

This shows that the people want good ambience and comfortable surroundings to give treat to
friends. A few amounts of people wish to order food online because it may be that it is cheap
to order food using offers of these applications.

Figure 5
It is seen by the responses that 73.6% of people use Zomato and 69% people use Swiggy,
while 37.3% people use Uber Eats. 1% use all the applications but prefer those which give
offers/Discounts. 1% use Box8 while 1% use Dine Out.

It can be analyzed by the data that Zomato is used by most of the customers. The reason
behind this is that Zomato was the first ever application which entered this business. The
Zomato has earned a great brand value and even it has rolled out the Zomato Gold in Market
which is luring more customers toward this Application.

Figure 6

It can be seen that 18.2% people do online food order once in a week. 35.5% order food more
than once in a month. 10.9% people order food online in alternate week. The people who
ordered food once in a month were 27.3%. 1% people used these apps twice a day, once in 3-
4 months, once in 15 days.
On analyzing the data, it can be seen that now most of the people have adopted online food
applications as most of them are using the platform more than once in a month. It also shows
that people are getting habitual of eating food at their doorsteps.
 Figure 7

It can be seen from the above pie chart that 23.6% people get impacted by the Summer
Season whereas 36.4% people get impacted by the Winter Season. 40% people don’t get
affected by the the seasons.
This data shows that most of the people prefer winter season because they might not want to
go out in cold weather outside and they even don’t prefer summer season foods from outside
as they might consider food in this season very unhygienic and problem of sweat of the
workers who make the food.

Figure 8
It can be seen from the data that 47.3% people do not get affected by the offers rolled out by
these applications but 52.7% people get lured by these offers.
By the analysis of data it can be interpreted that most of the people get lured by these offers
as the applications give a hefty discount to customers so the customers think not to cook the
food and ordering the food by online applications at their doorstep.

Figure 9

It is seen that 72.7% people order food online but only 27.3% people prefer Dine out at
restaurant.
After analysis it can be inferred that most of the people during the festival season like to sit at
home and enjoy the company of family, eating food with them. they also liked seeing the
match at home at their TV’s comfortably in privacy with their loved once. Some people liked
to dine out during these times because they may be sophisticated and enjoyed outside
ambience for parties.
 Figure 10

It is seen from the pie chart that 80% people didn’t used Zomato Gold but 20% people used
it.
This shows that most of the people don’t consider it useful spending Rs. 1500 to Rs. 2000 on
it. Some might think that Zomato Gold is not acceptable at all the restaurants so there’s no
use of spending this much amount on it. Now Zomato Gold is providing a free dish if the
Delivery order is more that Rs.300 but many people don’t consider it worth as ordering food
including the offer above Rs. 300 is not every ones cup of tea. But some think that it is worth
as they might utilize the full worth of Zomato Gold by going to those specific restaurant
again and again or order food above Rs. 300.
 Analysis of questions asked from the Restaurants

Figure 11

 Balaji Dhaba
 Marigold
 Little India
 Khatirdari

Figure 12

It can be seen that 50% collaboration is with Zomato, 25% with Swiggy and 25% used all the
above apps i.e. Zomato, Swiggy and Uber Eats.

Analysing the data it can be seen that Zomato is having maximum collaboration with the
Restaurants which is due to the Zomato Gold and since it gives great offers therefore the
customers order in more no. from Zomato. Zomato was the first platform which came in this
industry due to which most of the restaurants have collaborated with it.

Figure 13

It is seen that 100% of the restaurant’s turn over has increased.

Analysis shows that the restaurants have increased there earning after collaboration. The no
of orders may have increased which has resulted in higher turnover of the restaurants.

Figure 14
It is seen that 100% of the restaurants are getting more orders
It shows that people are lured by the cheap food and easy accessibility of food by the people.
Earlier only those people came in restaurant who had to dine in but now the restaurant is
getting extra income by delivery of their foods.

Figure 15

It is seen by the data that 50% of the restaurant is saying that the customers have decreased.
25% of the restaurants have no increase in the customers and 25% have increase in the
customers.
Mostly there is decrease in the customers because the customers of those restaurant might be
thinking that if they get that same quality and taste food at home without any need of
travelling there to the restaurant then why they should go there. Some restaurant have got a
increase in the customers because of there popularity on the Online Food Applications.

Figure 16
According to the responses some restaurant have to bear extra expenses only because of extra
orders that come due to online Food Applications. Some said that they had to bear the
expenses only in beginning. And the last one said that all the expenses was bear by food
delivery app and there was no extra expense from the side of restaurant.

This infer that different restaurant are experiencing different things. Some are bearing
expenses but some are not. So the logic here is that those restaurant who don’t invest much in
the restaurant and depend on the delivery app to a large extent and don’t roll big offers never
bear extra expenses. But those restaurant which give large offers and have good/lavish setup
in the restaurant then that has to bear more expenses and even loss.

Figure 17

It can be seen that 75% restaurants have suffered losses and 25% restaurants have suffered
losses in initial days.
It can be inferred that the most of the restaurants have faced losses but continuing with the
services. The total turnover of some restaurants have increased but there are some restaurants
which roll on big offers due to which they have to bear the maximum expense of offers.
Eg. If 50% discount is offered on the food of a specific restaurant then only 10% share of
offer expense is bear by the Zomato and Swiggy but 40% is bear by the restaurant itself.

Figure 18

The following responses have been obtained:

There are loses occurring on the restaurant but then also the restaurant are continuing with
these services as to the number of customers are increasing.
The restaurant think that they would be getting profits in future though right now the it may
be facing loses.
Some restaurant did not faced loss at all

It can be inferred that most of the restaurants are facing loses because of the the cancellation
of the orders by the customers. They are facing the loss in the form of the non presence of
customers in the restaurant. Most of the customers try to order the food online but due to this
the electricity, land expenses and wages of waiters is spent unnecessarily.

Figure 19

It can be seen by the responses that some restaurant faced increase in the orders in winters.
Only some restaurants had negligible difference between the seasons.
It can be inferred that these restaurant faced more orders in winters because people wanted to
stay home in winters and they considered food more hygienic.

Figure 20

It can be seen by the data that 75% restaurants were benefited by the apps but 25% people
were not benefitted.
It can be concluded that these apps faced benefited the restaurants by increasing the orders of
these restaurants and the orders were also increased which made there turnover increase
overall.

Figure 21

All the responses are that the expense of offers is bear by the online food Applications.
The reason being that they are highly competitive with other similar platforms and to lure the
customers they roll on more discounts. The Online Food companies are able to provide this
facility only due to the investment by the investors.

Figure 22

As per the responses it is seen that every restaurant is getting more orders when more offers
are rolled out.
It can be inferred that the offers lure the people and they tend to buy more food from the
restaurants and even tell other people about the offers given by the specific restaurant.

Figure 23

As per the responses every restaurant have started to earn more and more profit by this
collaboration with Zomato Gold.
The reason being this given by the restaurant is that they just have to offer 1 dish free to the
customer and this expense is given by the restaurant itself but in the meantime is getting
many customers by this collaboration. And even the Zomato is getting good amount of Rs.
1500 to 2000 by this Zomato Gold. And since Zomato Gold is not allowed on all the dishes
which is choose by the restaurant itself according to its economic strategy and even not
applicable on festivals. So the customers have increased and are using this service but on the
discretion of restaurant.
 CONCLUSION

The customers comfort is simply the primary facet good thing about such, whereas on the
second facet these system also are helpful for the expansion of eating place and food provide
trade, as by the utilization of digital food ordering system a eating place owner are ready to
attract the users attention by permitting them see the whole food menu in conjunction with
dish name, image, specialty, and price. Integration a web food ordering system isn't any
doubt are the simplest, cheap and helpful call for a eating place business owner. With
constant deluge of experts in urban areas and fast urbanization of Indian scene, the food
delivery and eatery portion is currently flourishing at a rankling pace. Adding to this situation
is an expanding number of cell phones and food delivery applications. Food delivery
applications have now turned into a major hit with well-informed people crosswise over
India. There are a few food delivery applications in India that one can download on advanced
cells to arrange food in a hurry and from the solace of homes. The changing urban way of life
of the normal Indian is sufficiently emotional to be ideal for the food-on-the– go and fast
home delivery models to develop at higher rates. The regularly expanding populace swarmed
metro urban communities and longer travel times are drivers for the helpful, prepared to eat
and less expensive alternatives of having food and foodstuffs conveyed at your doorstep.
Organizations that know about the colossal potential for development may wander straight in,
yet just the fittest will endure. Organizations who keep their offer and their image dynamic in
purchaser's brains, will take the greatest offer of the Indian online food benefit pie.
 ANNEXURE 1
IMPACT OF THE ONLINE FOOD MARKET ON THE RESTAURANTS
(For customers)
1. Which one you prefer more? 
a. Ordering Food Online
b. Ordering Food directly by calling the restaurant
c. Going to the Restaurant
d. None of the above

2. If you prefer Ordering food Online, then why?

3. Do your parents know about the online food applications? If yes, then do they
use it?
a. Yes, they order using the applications
b. Yes, but they don't order food online and prefer dine out
c. No, they don't know about the online food applications
d. Other

4. For giving treat to a friend, you prefer-

a. ordering food online
b. Dine out

5. Which online Food Application you use? 

a. Zomato
b. Swiggy
c. Uber Eats
d. Other:

6. How frequently do you use it? 

a. Once in a weak
b. More than once in a weak
c. Alternate weak
d. Once in a month
e. Other

7. Does season impact your online orders? If yes then which one? 
a. (April to September)
b. Winter (October to March)
c. Other

8. What is your reaction when online food App roll out offers like No Cooking
Week, Zomato Cricket Cup, Feast Challenge etc 
a. I order more frequently when these offers come
b. Do not affect at all

9. During Festivals, Cricket Match you prefer 

a. Ordering food Online
b. Dine out at a Restaurant

10. Do you use Zomato Gold? 

a. Yes
b. No
 ANNEXURE 2
IMPACT OF THE ONLINE FOOD MARKET ON THE RESTAURANTS
(For restaurants)
1. Name of the restaurant?
2. With which food delivery app have you collaborated?
a. Zomato
b. Swiggy
c. Uber eats
d. Other
3. After the collaboration has the turn over-
a. Increased
b. Decreased
c. Same
d. Don’t know
e. Other
4. After the collaboration the total orders have –
a. Increased
b. Decreased
c. Same
d. Other
5. Have the customers coming to dine at the restaurant?
a. Increased
b. Decreased
c. Same
d. Other
6. Do you have to bear extra expenses? If yes, then what are the extra expenses?
7. Have you suffered any loss due to this online food service at any point of time in
your business? 
a. Yes
b. No
c. Other
8. If instead of profits if you bear any loss then why are you continuing to
collaborate with these services? 
9. What is the impact of whether on the number of orders of the restaurant?
10. Are you benefitted from the offers offered by these apps to the customers?
11. Who bears the expense of the offers?
12. Does the number of offers impact the number of orders in the online food
application?
13. What is the profit does restaurant gets after tie up with Zomato Gold?
 REFERENCES

1. http://www.amity.edu/gwalior/ajm/paper_5.pdf
2. https://www.bloombergquint.com/technology/swiggy -vs-zomato-who-has-a-better-
chance-to-win-indias- hunger-games#gs.CdbOrzFm
3. https://www.gloriafood.com/restaurant-ideas/advantages-of-online-food-ordering
4. https://insidefmcg.com.au/2017/09/27/booming-food-delivery-apps-affect-restaurant-
industry/