Struggles of sustaining in an already crowded food delivery business, coupled up with Ola’s own ambitious EV and international expansion plans have finally led to the company restructuring its food delivery business in entirety. Just to refresh your memories, Ola was running its food delivery business via Foodpanda, the India business of which it acquired earlier.
(Foodpanda, which operates in more than 10 other markets under a different owner — DeliveryHero — remains fully operational outside of India.)
According to a report published in Mint, Ola will continue to run the food delivery business in certain capacity, though not as scaled up as it used to be. An official statement from a Foodpanda however, contradicts the speculated closure, Company spokesperson mentions that the company is now focusing on customised kitchens as well as other portfolio of food offerings. Sources mention that the company is in-fact in the process of hiring culinary experts, along the same vein.
In an emailed statement to The Tech Portal, a company spokesperson mentions,
As part of our ongoing business repurposing initiatives, we are focused on building a portfolio of own food brands and curated food offerings through our fast expanding network of kitchens. Many of these offerings are already available in all major cities through the Ola and Foodpanda apps.
For Ola, this would be the second time that it entered into food delivery and is facing headwinds. The earlier short-lived venture was called ‘Ola Cafe’. Ola Cafe was launched in 2015 and shut down a year later, in 2016.
Ola’s ‘restructuring’ of the food business comes on the back of Zomato’s and Swiggy’s dominating run in the segment. The food delivery business in India is dominated massively by Zomato and Swiggy — both unicorns with decent cash chest — and both the juggernauts have not shown any signs of slowing down. While Zomato returned from a slump to back being one of the leading players, Swiggy’s run has been short and nothing short of a dream-run. The food delivery segment is expected to be $2.5 Billion in size by 2021, according to data from RedSeer.
As of September last year, Foodpanda was processing about 3 million orders a month, compared to Swiggy and Zomato, both of which claim to handle over 30 million orders in the same period.
According to Mint, Ola has terminated contracts of most of its 1,500 food delivery partners, and laid off about 40 people. As of Wednesday morning (local time), the vast majority of restaurants listed on Foodpanda and Ola apps were not servicing in major cities.