40% revenue to come from delivery in 3-6 months: FoodPanda

Food ordering platform FoodPanda has forayed into food delivery segment in the country and expects about 40 percent of its revenues in 3-6 months to come from the new offering.

The company has started the service in five cities and plans to expand it to 10-12 cities by the end of the year.

"An important part of the user experience, apart from the quality of the food, is the delivery. This is what we want to sort out. We will offer delivery of food on behalf of our partners (restaurants) for a fee," FoodPanda India CEO Saurabh Kochhar said.

He further said: "We are still testing out the revenue model (in India) for this whether it will be fixed or order-based, but we expect the delivery business to contribute about 40 percent to the revenues in the next 3-6 months from 20 percent currently." Kochhar added that this service will help partners who do not have a delivery set-up as well as those who are looking at reducing their delivery costs. 

The programme is running in five cities (Delhi, Mumbai, Hyderabad, Pune and Bangalore) and will be expanded to 10-12 cities by year-end, Kochhar said.

He declined to comment on the investment details for the new offering saying it has not "parked a separate amount for this". It did not disclose its revenue numbers either.

FoodPanda, which has a presence in 39 countries, offers delivery in markets like Vietnam, Bangladesh and Singapore, where its restaurant partners do not have their own delivery set up. According to Kochhar, food delivery in India is a USD 15 billion market and only a fraction of that is online. FoodPanda has hired about 500 people for delivering food.

"We will ramp up this number to about 2,000 in the next 3-6 months as the business scales up," he said.

FoodPanda has over 12,000 restaurants across 200 cities on board its platform. Its investors include investment firm Rocket Internet (52 per cent stake), Phenomen Ventures, Investment AB Kinnevik and iMENA Holdings.