Online food business, especially in Dhaka and few other cities of the country, has witnessed an unforeseen rise, thanks to technological advancement and change in lifestyle.
“Now the online food delivery business market hits sales worth $10 million, which was almost nil in 2013, the year we initiated the business in the country,” said Ibrahim Bin Mohiuddin, deputy CEO of HungryNaki.com.
“The market will cross $5 billion by 2025,” he hoped, indicating the huge potentials of the sector.
HungryNaki, a local start-up, was the first to introduce the concept of online food service in the country in 2013 and later several other companies, including a few global ones, joined the business.
Currently, four companies including Pathao Food, share 90% of the market, leaving the rest for a few others.
Global giant ride sharing company Uber recently launched its online food delivery business in Bangladesh.
Dhaka Tribune has talked to several officials of the leading companies to find that approximately 25,000 orders of foods are currently being delivered every day on an average, while a total of 3,500 delivery persons are working, either as employed or freelancer.
People, staying at home, office or outsides, can now avail foods from their nearby favourite restaurants in a moment simply using mobile apps or websites.
HungryNaki initially started the business covering some areas of Dhaka and later expanded the business to Narayangonj, Chittagong, Sylhet and Cox’s Bazar. It delivers foods from 2,500 restaurants of the areas, according to their own data.
Following HungryNaki, global company foodpanda started the business covering the same areas but it was able to manage 4,000 restaurants, as per foodpanda’s official statement.
Pathao and Shohoz, two ride sharing companies, started the food delivery business last year and covered Dhaka and Chattogram only, their officials have said, responding to a query of Dhaka Tribune.
Pathao Food has agreements with 5,000 restaurants, the highest number, while Shohoz has managed only 1,200, they say.
Uber on April 30 launched ‘Uber eats’ in Dhaka covering only Gulshan, Banani and Baridhara with a registration of 150 restaurants.
Among the companies, Pathao Food is dominating the business with the highest number of orders and affiliated restaurants, Dhaka Tribune has found analyzing the data provided by the leading four companies separately.
It holds 42% market shares in terms of orders it receives every day, while foodpanda holds 32%, HungryNaki 8%, Shohoz Foods 8% and several other start-ups hold the rest 10% of the total share.
“We attained a 300% growth last year and are hoping more in future,” senior executive of foodpanda Syed Shakil Islam says.
The business is getting popular because people are being gradually dependent on technology, he notes.
Besides, people’s lifestyle is changing with higher buying capability and increased busy hours, which are leading them to take readymade foods, adds Shakil.
The growing number of restaurants has also played a role in pushing up the demand for online food service, he thinks.
“Ordering food online is very nice experience for me,” says Mashruka Mahjabin Sujana, a private university student from Rampura, adding that she often orders different types of food from her favourite restaurants through foodpanda apps.
It takes 20 minutes to one hour to get the food, she says, adding the costs of food are the same, but in some cases she needs to pay the delivery charge as an extra payment.
“I can save my valuable time avoiding food making for the guests at home or can treat them easily with favourite items through the service,” Sujana mentions, adding that through the service she gets the opportunity to compare foods of different restaurants.
Expressing satisfaction, Nabban Tahsin Haque, a private service holder, says ordering food online is a convenience.
“I need not go to restaurants, but get favourite foods I want being at office, home or outside, without any hassle,” he says.
How it all started in Bangladesh
HungryNaki Deputy CEO Ibrahim shared how they started business started in Bangladesh.
It was 2013, three friends — Tausif, Ahmed and Sazid — got together and sat in several meetings to make a plan for running an e-commerce business.
Feeling hungry during these prolonged meetings, they wished if they were served foods by anybody.
The trio came across the concept of online food delivery and realized that the service would ease the city people’s life.
Tausif, who died on May 16 at the age of 35, named the start-up HungryNaki.
“It was a great shock that we lost the pioneer of the business Tausif Ahmad,” he lamented.
Ibrahim said: “We initiated the online food business in the country and the rest including the global ones came here following us.”
Apart from HungryNaki, Pathao Food, foodpanda, Shohoz Foods, Uber Eats, some other few start-ups are trying to expand their businesses which are currently operating in small areas like Bashundhara.
Foodmart, Foodtong, Food24X7bd, Sheba Food are among the small companies running in the area.
Unexplored potentials
The business is till now centred on the capital and few other cities including Narayanganj, Chittagong, Sylhet and Cox’s Bazar.
“But the whole country still remains unexplored,” said foodpanda acting-manager Shakil Mahmud, adding that there was a huge opportunity to cover up these areas.
Referring to a government estimate, he said minimum 80 lakh people having high buying capabilities could be their target consumers.
“We have reached only a small portion,” added Shakil.
The expansion of business could generate huge employment, said Md Osman Saleh, executive (marketing) of Pathao food.
Challenges ahead
“The challenge that we mostly face is that the people in our country still consider ordering food online a foreign culture,” says foodpanda Senior Executive Tasnim Zaman.
People are not yet familiar with the food delivery services, she mentions.
Tasnim, however, notes that the mindset is changing with the passage of time.
Maintaining quality of delivery is also a big challenge for the sector, especially for those who operate the business with freelance delivery persons, as per industry insiders.
“Choosing the right delivery persons and ensuring their performance maintaining hygiene are challenges for us,” says Shohoz Marketing Director Shezami Khalil, adding that the riders (delivery person) are crucial part of the food delivery business.
She also mentions maintaining balance between supply of foods and their demand and having the restaurants in compliance with order management as other challenges.
Apart from these points, HungryNaki Deputy CEO Ibrahim thinks there should be a government policy for boosting online food business.