As the foodtech sector growth continues unabated in the Indian market amid Amazon’s entry into the space, the sector is expected to witness major disruption this year and in 2020. And a major Swiggy investor believes this boom is set to go on thanks to the nature of food and consumer services.
In an interview with TOI, Larry Illg, CEO of Prosus Ventures (earlier Naspers Ventures) which has invested $860 Mn for 39% stake in Swiggy, said that if around the world retention metrics are the highest for consumer services such as food delivery. “It’s better than ride-sharing. It’s better than retail. It’s way better than travel,” he added.
As one of the biggest foodtech startups in India, Swiggy is definitely riding the wave of high demand. Prosus is said to be looking to raise its investment to $1 Bn, making Swiggy its largest portfolio investment in India, according to media reports, though Illg refused to speculate on that.
While comparing India’s foodtech market with the US, Illg said that food delivery is less advanced in the US. He went on to say that US companies are actually learning from developing economies about how food delivery can be made more accessible and profitable. Illg was very certain about the growth of delivery and food aggregators, likening it to how mass production changed the textiles and clothing.
“I don’t know many people that make their own clothes anymore unless it’s a hobby. The same thing is going to happen with food.”
He added although food delivery started as a Friday or Saturday night luxury, it’s not just going to be a sort of wealthy urban thing. He credited product and technology innovation for making food delivery accessible to rural consumers. “Food delivery market has an opportunity to reach a segment of the population, geographies, and class of consumers that we haven’t seen with retail.”
For Swiggy and Zomato, ecommerce giant Amazon entering India’s food delivery market is a big threat. But Illg said Swiggy has the innovation to survive the competition. “They’re doing experiments with convenience store type items and dairy. This is about last-mile logistics and leveraging the brand and the infrastructure. It’s natural for players in online retail, this is an immediately adjacent space,” he added.