The name, cloud kitchens were until a couple of years ago was anonymous for most of us. However, With changing lifestyle patterns and with the growth of online food ordering platforms such as Swiggy and Zomato, the demand for tasty food delivered in the shortest possible time is sky-high and cloud kitchens are set up to do exactly the same, working on a delivery-only model emphasizing on delivering delicious food in the shortest possible time.
Why cloud kitchens are becoming popular?
According to the NRAI report, the organized cloud kitchen market in India is estimated to be around 928 Crores in 2019 and is expected to reach a valuation of $1.05 Bn by 2023. The rising popularity of cloud kitchens amongst the Indian audience is attributed to one of the following factors.
1. Lower investment costs:
The cost of setting up a traditional restaurant dinner has increased several times due to various factors including the cost of renting a place in a prime location, infrastructure, and labor costs. But, unfortunately, the profit margins are falling due to heavy competition in the Indian restaurant industry.
Indeed, within the first year, almost 60% of restaurants shut down operations. This has led to investors and budding restaurateurs to consider other viable investment opportunities that are risk-free and at the same time profitable, and all these boxes are ticked by cloud kitchens!
Two in three restaurateurs who own a dine-in restaurant in India are in fact looking to invest in cloud kitchens rather than opening a traditional brick and mortar outlet in India. Such has been the impact of cloud kitchens.
2. Swiggy and Zomato’s investment in cloud kitchens
Food aggregators including Zomato and Swiggy have identified and are investing heavily in cloud kitchens that will help them maximize their profits from orders.
In fact, swiggy alone serves around 15 lakh orders a month from more than 500 cloud kitchens set up in 14 cities across the country through‘ Swiggy Access.’ Since the launch of Swiggy access in 2017, the Bangalore-based startup has already invested around 175 crores in the business and is planning to invest another 75 crores by March 2020. Currently, Swiggy has 250 unique brands listed on their application.
Swiggy’s rival and closest competitor Zomato are also investing heavily in cloud kitchens focusing more on tier 2 and tier 3 cites were there is a sudden surge in the demand for food deliveries.
You can sign up as a restaurant partner or a cloud kitchen developer with Zomato through their online portal.
3. Changing Lifestyle patterns:
As the per capita income of the Indians has swelled by 10% in the current fiscal year, there are more people working in an Indian household with both male and female members holding jobs and the dynamics of cooking every day is changing due to busy schedules, work pressure and other factors, which has made ordering online the easiest solution.
Over 60% of millennial’s order food in or dine out at least once in a month and are constantly on the lookout for tasty and delicious food. Unlike the traditional crowd, they do not want to settle in for the same old choices and want to experiment with the food that they order. Cloud kitchens provide the same as they operate under multiple brand names serving different cuisines under a single roof to tangle the taste buds of the millennial population in the country.
Two simple tips to boost cloud kitchens profits:
1. Invest in a cloud kitchen software
Cloud kitchens work in a fast-paced environment, and it is highly important to have a cloud kitchen software that enables you to manage end-to-end operations right from online order handling, inventory management, waste reduction, and a strong CRM, that ensure smooth operation and increase profits
2. Develop your own website or a mobile application:
If you’re setting up a cloud kitchen, then apart from solely depending on Swiggy and Zomato for receiving orders you might as well consider to get your own ordering platform which could be a progressive web app or a traditional mobile application. This allows you to offer the same price to customers and get orders directly. Thereby cutting down on the commission paid to aggregators.
Getting an own ordering platform for your cloud kitchen setup opens up the opportunity to diversify your customer base and build an audience group that allows you to run customized offers and campaigns resulting in more orders and revenue.
The low set-up costs, lower operating expenses and the ever-increasing demand for home deliveries in the country have made cloud kitchens the most viable and risk-free investment option. The key to run a successful cloud kitchen setup is to have the right technology that enables you to manage operations, boost sales and grow your business with ease.
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