In the last 30 days, Gautam Udani delivered 562 orders across Mumbai, the average cost of each being Rs 300 and the total sales amounting to Rs 1.68 lakh. The 26-year old runs a portal for midnight food delivery called Madorders.com, started in December of 2011.
Udani and his partner, Jigar Jatakia, 23, stumbled upon this business model when they saw a demand from call centre employees and students for food at odd hours . "Many party or work till late and want food at awkward hours, but there is no service," says Udani. His team, therefore, swooped on this opportunity waiting. Both being engineers, they together put in Rs 22 lakh to start their business.
Udani has taken the franchisee route. He has five franchisees in the pipeline (to be operational by March). Enquiries are also coming from Pune, Delhi and Ahmedabad.
The profits have been built into the food cost and there is a delivery charge of Rs 30 for orders below Rs 200. Udani hopes to reach break-even in March with the franchisee fees.
Udani and Jatakia are not isolated in their endeavour. Many 20-somethings have spotted such opportunities and become ‘online’ entrepreneurs. They use the internet to cut costs of setting up a bricks-and-mortar business model. Initial investment = Rs 15-20 lakh.
Take the case of 25-year old Aditi Talreja, who returned to India two years ago, after studying in New York. Along with her degree in finance, she also brought home a business idea - an online portal for food delivery called DeliveryChef.in. "In the US, I used online delivery sites regularly. While one can book tickets for movies to flights online in India, there is no option for food delivery," she says. She filled this gap a year ago with her venture. Today, it boasts over 10,000 registered users and has delivered 15,000 orders (average size, Rs 500 each).
Similarly, Rishad Mehta's Foodzig.com portal was conceived in August of 2011, with initial capital of Rs 15 lakh after a chance meeting with a global distributor for exotic foods like cheese and meat products. This 23-year-old's venture acts as the retail end of the food chain for exotic foodstuffs. His venture has delivered 1,000-1,800 orders in the past six months. Importantly, Foodzig.com reached the break-even point last month.
How? Foodzig profits from the retail margin of 25 per cent passed to customers. There is also a delivery charge of Rs 150 for orders up to Rs 3,000, mainly to cover the packaging (all products are delivered in cold boxes filled, with gel packs). If you ordered a food item worth Rs 100, you will pay Rs 250 (Rs 100 + Rs 150) and Mehta would get Rs 175 (Rs 25 + Rs 150).
DeliveryChef.in is a free service. Its revenues are sourced from the restaurants or service providers listed on the website, as a percentage of the order amount. Talreja is shy to share her margin, but is expecting to reach break-even in 2013.
All these business ideas may sound innovative and glamorous, but for Mehta, scalability is an issue. "We are a boutique outfit. We don't have our own storage or cold-chain in place and are heavily dependant on suppliers. Therefore, expansion may not be possible," he explains.
However, Talreja is confident. Online delivery portals have been tried and tested in the West and many are raking in huge profits. She has tweaked that model for the Indian market. More, not having to set up operations physically is a big saving.
If you want to tread this path, their advice is to conceive an idea and take it further. The online platform supports not just creativity, but also creative entrepreneurs.