A STUDY ON CUSTOMER’S ATTITUDE AND PERCEPTION TOWARDS

DIGITAL FOOD APP SERVICES

Dr. Neha Parashar1 Ms. Sakina Ghadiyali2

ABSTRACT

Services are intangible products where in there cannot be any transfer of possession or ownership, and they
cannot be sold but come into existence at the time they are consumed or bought. Services cannot be stored or
transported. Eg: accounting, banking, cleaning, consultancy, education, etc.
Digital services on the other hand are services that are anything that can be delivered through an
information infrastructure such as the internet, in various forms i.e. applications, web pages, social media,
etc. In the paper the major focus will be on the various apps that are available either by 3 rd party for delivery
purpose or by restaurants themselves for various purposes like delivery, pointing system, in house app
ordering, etc.
Consumer behavior is the study of how individual customers, groups or organizations select, buy, use, and
dispose ideas, goods, and services to satisfy their needs and wants. It refers to the actions of the consumers in
the marketplace and the underlying motives for those actions.
From this research paper we would understand the shift of consumer’s behaviors with the introduction of
technology and what are the different kinds of applications that consumers are satisfied with and what
makes them happy and satisfied about the service.
The main objective of the paper is to understand the relation between facilities and the purchase behavior.
Secondly to find the most popular app in the food delivery industry and understand as to how have
technology played an important role in the restaurant industry.
Keywords: Consumer behavior, Food delivery app, zomato, fasso, e-commerce,

INTRODUCTION customers. This scenario doesn’t exist only in

one country but all across the globe. Being up
In today’s world service sector contributes
to date with the customers’ expectations
64.80% in GDP. Zomato is one of the most
helps firm retain customer’s to a greater
popular applications that provide services to
extent. The Figure 1 below shows the average
the user to discover restaurants. The rise of
retention of customers with the help of
digital technology is reshaping the
providing various kinds of facilities to the
industries. With the increased use of
customers.
technology, the number of people engaging
into the digital sector are rapidly increasing. Figure 1: Retention of Customers with the
Even Consumers are accustomed to Help of Digital Technology
shopping or even ordering online through
apps or websites, with maximum
convenience and transparency, expecting the
same experience that they would get from
the outlet itself. To match up with the
consumer’s expectations apps are providing
increased facilities and services to the

1. Faculty (Finance), IBS Business School,

Pune
2. Student, IBS Business School, Pune Source: http://www.mckinsey.com
Digital technology has just started growing, it  Facebook ordering.
will continue to grow at a rapid rate and with  Tabletop e-waiter & checkout.
the effect of this so will the various other  Digital menu boards + smartphones.
industries, including the food delivery  Games while-u-wait.
industry. In the below figure we can see that  Online coupons.
the usage of online portals have been
constantly increasing and they are expected to Indian Food App Scenario
increase at a rapid rate even in the near future. With all the boom in digital industry across
Our research indicates that online penetration the globe, it’s had its impact on the Indian
of the total food-delivery market broke 30 economy too. The online food ordering firms
percent in 2016. It is also believed that the have sprouted up in bulk. The market size of
penetration rates will grow further as the food in India is expected to reach Rs. 42 lakh
market matures, eventually reaching 65 crore by 2020, reports BCG. Presently, the
percent per year. As per another research the Indian food market is around $350 billion.
perceptions of the user regarding the service The space is coming up with a lot of
quality of ZOMATO is less than his innovation catering to their customer
expectations of what an excellent service convenience, satisfaction and retention. This
should be. So, ZOMATO cannot be categorized has also built room for a lot of new players,
an excellent service provider as per the who are targeting specific groups of people.
responses we have received from the users. Many new players joining the segment with
Figure 2: Expected Growth of online and innovative business models such as
offline industry delivering food for health conscious people,
home cooked meals, etc.
Food tech is the hot talk in the startup town.
After technology startups have made their
mark in the e-commerce, taxi & real estate
sectors, now the ever-hungry Indian entre-
preneurs are looking to satiate the appetite of
others. Food tech is a vast market and food
delivery startups are just a part of it.
Various apps in the Indian market are:
 Food Panda
http://www.mckinsey.com  Zomato
The recent innovations in the global market  Swiggy
are:  Box8
 Fasoos
 Mobile ordering.
 Fast food delivery apps
 iPad order kiosks.
Figure3: The various food apps available in India
Services Provided
Apps Originated Delivery Online Menu Expanded Delivery Charges
Food Panda Singapore Yes Yes 12000 Restaurants Yes
Zomato Portugal Yes Yes 10000 Restaurants No
Beer Café India No Yes 33 Restaurants No
Box8 India Yes Yes 60 Stores Yes
Fasoos India Yes Yes 125 Centers No
Dominos India Yes Yes 800 outlets No
Just Eat Denmark Yes Yes 2000 Restaurants No
Swiggy India Yes Yes 5000 Restaurants Yes
Pizza Hut Delivery US Yes Yes 1300 Outlets No
Fasoos India Yes Yes 200 Stores No
Source: Author created with the help of secondary data
LITERATURE REVIEW segments in India’s retail sector, valued at
$490 billion in 2013. The Indian food retail
A research on the changing market for food
market is expected to reach Rs 61 lakh crore
delivery (Carsten Hirschberg et al 2016)
($894.98 billion) by 2020. The Indian food
indicates that online’s penetration of the total
processing industry accounts for 32 percent
food-delivery market broke 30 percent in
of the country’s total food market, one of the
2016. We believe penetration rates will grow
largest industries in India and ranked fifth in
further as the market matures, eventually
terms of production, consumption, export
reaching 65 percent per year.
and expected growth. The online food
According to gloria food the advantage of ordering business in India is in its nascent
online ordering and the reasons for the stage, but witnessing exponential growth.
growth of food delivery app industry are The organised food business in India is
Convenience, Simpler menu to manage, worth $ 48 billion, of which food delivery is
significant savings, no hassels etc valued at $15 billion. Investment in food
FoodPanda is an introduction to the newest startups, which mainly include food ordering
food sensation that’s here to stay (Shiyin apps, has increased by 93 percent to $130.3
Chan , 2015) Foodpanda is a global online million, comprising 17 deals till September
food delivery marketplace headquartered in 2015, as against only five deals in 2014.
Berlin, Germany. Fun fact - they’re also According to a January 28 report in The
known as hellofood in other places in the Times of India, Rocket Internet backed
world. Foodpanda has not found a buyer even with
Bhavna Singh (2015) said that Foodpanda a rock bottom price tag of $10-15 million.The
has been present in the Indian market since company laid off 300 people in December
May 2012. Foodpanda first major move was 2015, about 15% of its workforce. In
acquisition of TastyKhana, which was September 2015, TinyOwl had fired 100
launched in the city of Pune in 2007. employees in its Mumbai and Pune offices.
Together with TastyKhana and JUST EAT, it And in October, Zomato sacked 300 workers.
is now present in over 200 cities and partners UK based Just Eat entered and exited the
with over 12,000 restaurants. market faster than you would order and
receive pizza.
She also talked about JUST EAT was
launched in Denmark in 2001 and was traded RESEARCH METHODOLOGY
publicly on the London Stock Exchange. Objectives
Their Indian business was launched as
 To analyse factors affecting attitude of
Hungry Bangalore in 2006. It was renamed in
customers regarding food delivery apps
2011 when JUST EAT acquired a majority
share in the business. Today, the company  To find the most popular app in the
partners with over 2,000 restaurants. digital food delivery app
 To analyze the relationship between food
According to Deepinder Goyal, Zomato CEO delivery aap and the facilities provided
and co-founder told TechCrunch that he by the same.
expects to reach 10,000 restaurants in India in
a few months. “We have a sales team of DATA COLLECTION AND ANALYSIS
around 300 in India and 5,000-odd The data has been collected by both ie
advertisers… these partners know the primary and secondary sources. Primary
volume we bring to them so it is quite easy data includes information collected through
for us to launch this new service.” questionnaire based on attitude and
According to a recent sectoral report perception of customers using food delivery
published by IBEF (Indian Brand Equity apps in India. Secondary data included
Foundation), food has been one of the largest collecting information about various apps,
the industry position, etc from the various
portals from the internet, journals, magzines Table 4: Demographic profile
etc Category Number Percentage
Sample size Gender
Male 94 27%
The total sample size was 129 respondents, Female 35 73%
out of which a major portion was Gen Z i.e. TOTAL 129 100%
people of the age group 20-25 years. Age
Research Tools 20-25yrs 115 89%
25-30 yrs 8 6%
Following research tools were used to do 30-35 yrs 4 3%
analyses and to draw conclusions 35 and above 2 2
TOTAL 129 100%
 Cronbach alpha
Profession
 Chi square Unemployed 2 2%
 Weighted average Student 116 90%
 Descriptive analysis Working 7 5%
Self employed 4 3%
HYPOTHESIS TOTAL 129 100%
Income
 Ho: There is no significant relationship
50000-100000 61 51%
between factors affecting usage and the
100000-170000 25 21%
food apps
170000-250000 14 12%
H1: There is a significant relationship Above 250000 19 16%
between factors affecting usage and the TOTAL 119 100%
food apps Consumption
Less than 1000 74 57%
 Ho: There is no association of popularity 1000-1750 28 22%
with the awareness methods used. 1750-2500 12 9%
2500-4000 9 7%
H1: There is association of popularity of
More than 4000 6 5%
an app with the awareness methods
TOTAL 129 100%
used.
Source: Author with the help of primary data
 Ho: There is no most popular app for
food delivery among samples
Specific Information Relating to Customer
H1: There is a most popular app for food Behavior
delivery among samples The responses of the customer about the
ANALYSIS AND INTERPRETATION usage and the factors affecting usage were
tabulated and analyzed to understand their
To understand the behavior of customers
behavior.
regarding usage of food delivery apps, socio-
economic characteristics of the customers A. Frequency of usage of Food Delivery
were studied. They are the important apps
variables as they decide the consumption The Table 5 below shows the usage of
pattern and customer behavior regarding different food delivery apps among the
these apps. Generally it is believed that, as selected samples. As per the data collected
the income, age and education of the we can analyze that food panda and fast food
customer varies impact the usage pattern of delivery app are among the most preferred
mobile apps. The following table 4 represents food apps by consumers followed by Swiggy
the socio-economic pattern of the selected and Zomato.
sample.
Table 5: Usage of apps as per the respondents An examination of data reveals that being
majority of the responds from Gen Z, the
APPS USAGE
source of information regarding mobile food
FoodPanda 72%
apps, there is usage is basically via social
Zomato 62%
media platform or friends and families.
Swiggy 65%
Box8 47% Chart 2: the most commonly available
Fasoos 58% payment options for food app customers
Fast food delivery apps 76%
Others 8%
Source: Author with the help of primary data

Graph 1: Factors affecting usage of the Food

Delivery apps

Further analysis says that majority customers

prefer credit/debit card payment or cash on
delivery, very few customers prefer online
payment mode.
The payment options open to customers are
cash on delivery, net banking, payment
Source: Author with the help of primary data portals and debit or credit cards. Out of these
The main objective of this research is to find from our research we find that cash on
out factors influencing customers regarding delivery is most preferred by the customers-
usage of food delivery apps. From Graph 1 40% followed by debit/ credit card
we can analyze that speed of delivery is the payments- 26%.
highest attractive feature on Food Panda, C. Special Apps
swiggy, box8 and fast food delivery apps.
The second highest feature preferred by the Special apps are those apps which can be
consumers is the quality of service provided used in the restaurant; they are not basically
by the apps and the ordering experience. the delivery app but restaurant apps. Agent
Discount is considered one of the most jacks bar, Beer café and 15cafe coffee day are
important factor while ordering from food among the most used special apps. Gen Z use
panda and fassos. beer café app because of easy access whereas
agent jacks bar because comfort in using.
B. Marketing effectiveness Similarly they prefer 15cafe coffee day for
Chart 1: Source of information regarding loyalty points
mobile App Graph 2: Comparison of the most attractive
feature between all the special apps

Source: Author with the help of primary data

Source: Author with the help of primary data
Graph 3: Weight Average of Factors landscape, the food delivery and restaurant
Affecting Usage of Mobile Food Apps segment is now thriving at a blistering pace.
Adding to this scenario is an increasing
number of smartphones and food delivery
apps. Food delivery apps have now become a
big hit with tech-savvy individuals across
India. There are several food delivery apps in
India that one can download on smart
phones to order food on the go and from the
comfort of homes. The present study found
a significant relationship between factors
considered important while selecting a food
Source: Author with the help of primary data
delivery app. And from the analysis it was
From the data collected we can generate that also found that the facilities offered play a
according to the weighted averages of the major role in making a purchase from an
factors the highest weight is given to comfort app. Social media should be the most desired
in ordering and good condition of food at the tool for marketing by firms. Currently cash
time of delivery. Thus restaurants must on delivery is the most preferred option of
concentrate on these services more as payment by the respondents but other digital
compared to others. Other than these two techniques are also in the growth stage.
factors, customers prefer to check restaurants Firms must also make sure that the apps are
available nearby in the app and expect comfortable and user friendly. The special
correct order with no faults in totaling. apps are a convenient way for the consumers
to place orders and for the company to
Chi Square test between Factors and Food apps attract further more consumers but the
The research also tries to test the relationship comfort of usage must be given a higher
between factors affecting usage of food apps preference.
with different apps available in market.
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***
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January - June, 2017

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