Ola, the Indian ride-hailing startup, is overhauling its food business.
According to a report in TechCrunch, citing sources familiar with the matter, Foodpanda, the food delivery startup Ola purchased in late 2017, will now focus on making private-label food for delivery. Ola currently has more than 50 kitchens churning out food for four private labels Flrt, The Khichdi Experiment, Lovemade and Grandma’s Kitchen. These brands make shakes, biryani and khichri.
The move comes as Foodpanda is finding that competing against Zomato and Swiggy is a losing battle. Sources said that after Ola acquired Foodpanda it aggressively went after consumers, offering deep discounts at the beginning of 2018. Having committed $200 million for the Foodpanda operations, Ola decided to revisit the unit after the discounts started to lose their impact. With Zomato and Swiggy in a battle for first-place dominance it is hard for others to compete unless they have deep pockets. Foodpanda process around 3 million orders a month, which is tiny in comparison to Zomato and Swiggy. The two each handle more than 30 million orders each month, according to the report.
People familiar with the matter said even Uber is having a tough go of it, trying to sell Uber Eats to either Zomator and Swiggy, but failing to reach a deal. Uber, which went public earlier this month, has reduced its budget for Uber Eats in India since the failed talks.
“As part of our ongoing business repurposing initiatives, we are focused on building a portfolio of own food brands and curated food offerings through our fast expanding network of kitchens,” Ola said in a statement to the news outlet. “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.”