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Foodpanda offloads many restaurants as it shifts focus to 'dark kitchens'

The company's services are either currently not available or are scantily available across many Tier 2-3 cities and in select pockets of metro cities.

April 19, 2019 / 05:37 PM IST

Ola-owned Foodpanda has delisted many of the restaurants from its platform as it plans to pivot its services with a focus on private label brands and some niche fine dine restaurants. The plan is to aggregate all of these under one roof through 'dark kitchens', according to people privy to the development.

In this context, 'dark kitchens' will be places wherein the company will aggregate its own brands besides few other restaurants and allow them to cook under one roof and then distribute food from there.

The company's services are either currently not available or are scantily available across many Tier 2-3 cities and in select pockets of metro cities.

"As part of our ongoing business repurposing initiatives, we are focused on building a portfolio of own food brands and curated food offerings from select partners through our fast expanding network of kitchens. Many of these offerings are already available in all major cities through the Ola and Foodpanda apps. We continue to invest in expanding our facilities and kitchens, as well as our portfolio of food offerings for customers. We remain committed to our mission of building a superior food experience for millions of our customers," a company spokesperson told Moneycontrol.

While the company did not directly comment on the offloading of the existing restaurants from its platform, a source said that increased focus on Ola's own line of brands from its kitchens have rendered some areas in smaller cities and towns unserviceable, including suburbs and low demand areas in some cities.

The number of cities affected couldn't be immediately ascertained. As per the company's website, it delivers to more than 100 cities in the country.

Till the beginning of the year, the company claimed to be processing over 300,000 orders a day from 60,000 restaurant partners across the country with a food delivery network of 125,000 delivery partners.

"The company's plan is to heavily concentrate on private brands like Hola Chef which they acquired and cater to niche segment of restaurants like top level fine dines and gourmet offerings. This entire overhaul is likely to take three months," said one of the sources quoted above.

Over a year and a half after SoftBank-backed ride-hailing service provider Ola shut down its food delivery business Ola Cafe, Ola re-entered into the food delivery space with the acquisition of Foodpanda in 2017.

However the company is having a tough time competing with cash rich rivals such as Swiggy and Zomato in the capital guzzling business. This initiative is likely to give Foodpanda some breather. Some of the private label brands of Foodpanda include names like FLRT and Lovemade.

According to media reports, Ola recently also cut down on investment in Foodpanda as it goes ahead with its plan B.

Foodpanda competes with cash rich Swiggy which last raised $1 billion in a round led by existing investor Naspers and Zomato that last announced a fund raise of $62 million led by Delivery Hero.

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Priyanka Sahay
first published: Apr 19, 2019 04:58 pm