As the sudden outbreak of COVID-19 hit the world, there had been a constant decline in the food and beverages business across the nation. Since the lockdown declared by the Government on March 25 2020, people are more confined to home-made food than delivering the food online or dine-in restaurants. The HORECA (hotels, restaurants, catering) segment along with food deliveries are in a state of utter shock and the road to recovery looks painful and full of difficulties to recover.
Hot sizzlers and Cheese Burst Pizzas has been replaced by Home-made Pasta and Palak Paneer. This has really put the business of online food delivery apps such as swiggy and zomato under the situation of loss and many restaurants are on the verge of shutting.
How Swiggy and Zomato grew in our lives
In the past few years, Zomato and Swiggy have worked as a lifeline in the lives of people who live alone, office workers, students and families who wanted to change their taste in every once in a while from homemade food to something crunchy and crispy. But the Pandemic has turned the table upside-down.
The 21 days mandatory lockdown showed a drastic decrease in demand for outside food. People have become careful in choosing what they eat to save themselves from virus and food from outside is the last thing they want to prefer since the pandemic hit badly.
The business was running at a good pace till February but from March things changed, in April following the lockdown there was a huge void in the business. After easing up the lockdown a bit, the online food delivery platforms wished to revive the situation. But the result showed that it has recovered only 30-40%business from what it was in January and February 2020. June and July months have also not shown any large difference in the situation.
How lockdown affected the business (The COVID impact)
Following the lockdown, Swiggy had fled around 1500 (13%of total)of its workers including cloud-based kitchen managers and other staff members and if a situation like this continues, likely there are chances that it will fire another 300-400 employees in coming months. Zomato is no different in this situation. It has also fired around 500 employees which accounted for about 30%of the total workforce.
Sriharsha Majety, co-founder of swiggy requested Swiggy customers to order more and dine-in at restaurants, 25 per cent of which were a step away from shutting down to never open again.
The pandemic and road to recovery mean stiffer competition for battle-bruised Swiggy and Zomato and between different cafes, restaurants and catering businesses.
The dine-in restaurants are even in more bad condition. Some people might order food to eat in exceptional cases from online delivery but going to a restaurant is still a distant dream which is giving hard time to the owners and workers of restaurants.
The situation of the relation between restaurant staff and online delivery platforms is making the situation even worse. The situation is making the owners to ignore the online delivery platforms and switching to their own online delivery methods. Impresario Handmade Restaurants that owns brands like Social and Smoke House Deli has launched its online delivery platform and fleet. The only way and hope to survive this pandemic is technology. Becoming more technological friendly is the only helpline right now.
The road to recovery
“The market will start looking up again once the restrictions start going down. This will certainly help food tech and food delivery platforms to regain business….unfortunately, one still does not know of the end date of the pandemic,” said Dipti Lavya Swain, partner at HSA Advocates. Swain advises food tech startups.
It will take a few more months to recover the utter shock for online delivery platforms to recover from the lapses it faced. The estimate and survey say that it will only till December that the platforms will recover till 60-70%of its sales and it will be till April 2021 that it will reach to a full-scale business if the pandemic situation comes to an end. The road to recovery is very slow and full of hardships. The online platforms have stepped back 2 years due to the COVID situation. The restaurants and dine-ins will take even more time to recover.
As Lockdown 3.0 is introducing it is opening up more restrictions though the cases rising in the country is still a worry. Cloud kitchens and technologies can pave a way to recover for Siggy and Zomato but it will take time. There’s hope in disguise that people will return back to their working cities and it will call for more outside food delivering from online resources which can help a steady recovery for the platforms.