No more than 10% of startups survive. Competition has toughened on the market of healthy food delivery

10.07.2017 No more than 10% of startups survive. Competition has toughened on the market of healthy food delivery

The competition has toughened on the Russian market of healthy food delivery. According to the GrinDin company representative Alisa Shabanova, huge companies stick to price dumping and provide money for marketing. That is the reason why in middle and low price segments no more than 10% of startups survive. Notwithstanding, the market is growing, and the healthy food delivery service does not lose its value.

Subscription food is a business service providing a client possibility to order a menu for several weeks and get a prepared meal by a courier.

Demand begets supply. According to Technomic, the volume of healthy food delivery on the world market reached $1 bn in 2015, while by 2020, it would boost up to $10 bn.

According to Easy Meal, the Russian market consists of $30–35 m, while the number of subscribers, as analytics think, reaches 150 thousands of people. Mostly, they are inhabitants of Moscow and Saint Petersburg.

Representatives of ‘Korolevskiy Ratsion’ figured out that about 20 new startups emerge in these cities every year. However, only a handful of them manages to continue working. The reason is a high competition. Huge companies lower prices due to the product quality and delivery frequency – products are brought 3-4 times a week. As a result, startups suffer losses as they deliver food made of fresh farm products every day.

Korolevskiy Ratsion (Royal ration) presented the statistics about the number of services working in each price segment:

  • 25% - high – delivery starts from 4 000 RUB per day;
  • 46% - middle – delivery starts from 2 to 4 000 RUB per day;
  • 29% - low – delivery starts from 2 000 RUB per day.

The majority of startups are subscriber-oriented. They spend up to 1200 RUB on food. It is in this range where the competition is the toughest.

With the aim of surviving on the market of healthy food delivery, the companies increased marketing expenses and do their best to boost the client loyalty: they offer a special menu, reasonable product lines, discounts and many other things.

According to GrinDin, the competition would toughen: the market is expanding, the entrance fee is not high, ‘delivery’ services do not spend money on office rent and personnel. That is why their food is cheaper. By the way, popular restaurants have also begun offering the ready-made ration delivery service.

The only way out for startups is business launching in regions. In megacities, the healthy food delivery service is not very popular yet, and demand is higher than proposition.

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