We love ordering food online. Also, there is huge potential in the food delivery business in India, but still, food delivery businesses in India are facing a tough time out there.
Whether it is Zomato, Swiggy, UberEats or Foodapanda, all are facing a common issue that is losing more money than they are earning #BurnRate.
Foodpanda burn rate is highest among the Indian startups. According to a recent report by business intelligence platform Tofler, “Foodpanda’s losses stood at Rs 756 crore against its total revenue at Rs 82 crores for fiscal 2018-19.”
The company has reported a 230% jump in its net losses from the last financial year. And it is not only Foodpanda, every major player including Zomato and Swiggy are also sailing in the same boat and have reported mounting losses. Swiggy’s losses mounted by 500% for fiscal ending 2019 with the net loss to the tune of Rs 2,346 crore.
Why is it so?
There is a common thread running in losses of food aggregators. According to Tofler CEO, Anchal Agarwal
“The significant increase in expenses from the last year is contributed by discounts provided and delivery charges incurred for Foodpanda.”
For Swiggy too, the jump in losses was due to a multi-fold increase in delivery costs, among other major reasons, she had said earlier.
“Foodpanda’s burn rate of Rs 756 crore over Rs 82 crore of revenue is one of the highest among Indian startups,” said Anchal Agarwal. “It is interesting to note that the company has incurred delivery charges of Rs 267 crore compared to its revenues of Rs 82 crore. The discount expenses were to the tune of Rs 137 crore (that’s nearly 1.5x of revenues),” said Agarwal.
But despite all the fuss of burn rate, companies are pouring more money as Indian food delivery market has huge potential and major player likes of Zomato and Swiggy have succeeded in reducing their burn rate.
Source: FinancialExpress
Also Read: How Food Delivery Startups Such As Swiggy, Foodpanda, Uber Eats Earn Money
