What Do Millennials Want From Ordering Apps

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How food ordering apps are eating into millennials' income

A report by FICCI and Technopak estimated that a higher share of consumer discretionary spends was being absorbed by eating out and ordering in, a trend which the report predicted would strengthen in the following five years. (Bloomberg) — A report by FICCI and Technopak estimated that a higher share of consumer discretionary spends was being absorbed by eating out and ordering in, a trend which the report predicted would strengthen in the following five years. **(Bloomberg)**

6 min read . Updated: 22 Jan 2019, 11:07 AM IST

Overspending on food can put a significant dent in your finances over a period of time
Millennials are eating out or ordering food more frequently compared to Gen Xers, who are now in their late 30s and 40s, and Baby Boomers, who are of retirement age

For Smita Beriwal, 26, quality time at home includes trying out a new place to order food from. Beriwal is a self-confessed foodie who can't be bothered to make her own meals and with food delivery apps like Zomato and Swiggy, it's unlikely she will change her habit anytime soon. "Cooking is too much of a hassle after a long day at work; so my flatmate and I order out at least a few times a week," said Beriwal, who works as a PR executive.

Eating at a restaurant is no longer an occasional event for the millennials. The popularity of food delivery apps is a testament to this. "With their hectic schedules and lifestyles, an increasing number of Indians turn to the convenience and reliability of Swiggy for their everyday meals. This includes time-pressed, tech-savvy millennials who are looking for food options delivered to them in a matter of minutes, as well as people who just want to enjoy a relaxed food experience in the comfort of their homes," said Srivats T.S., vice-president, marketing, Swiggy.

Young professionals like Beriwal work hard and relax harder. As lifestyles change, quick and easy solutions like food delivery are becoming both affordable and necessary. But are millennials ignoring the latte factor, which refers to unconscious overspending on routine things.

Dinner for one

Like Mumbai-based Beriwal, who lives away from her hometown in Assam for work, many young professionals find themselves in a tight spot when they start living independently. "My mom had a meal ready for me when I got home from college. But now it's up to me to do everything from buying groceries to getting a gas connection," she said.

This is a problem that most millennials face. "For earlier generations, moving was a collective thing. When they relocated to a different city for work, they would take their families along, or live with a relative, so preparing food would not be an issue. But now most of us have become much more nuclear, and young people moving into unfurnished apartments have to sign up for a gas connection, which takes time and effort, and buy all other necessities if they want to cook at home," said Gayatri Jayaraman, author of Who Me, Poor?, a book based on urban poverty.

According to analysis by Deloitte, convenience is an important consideration for millennials on account of their hectic lifestyle. Lack of time is one of the key reasons for growth in online shopping and online ordering from restaurants. It is for this reason that the "ready to eat" product category has grown exponentially at the rate of over 28% per annum over the past five years or so, said the Deloitte report.

Millennials are eating out or ordering food more frequently compared to Gen Xers, who are now in their late 30s and 40s, and Baby Boomers, who are of retirement age. Over 60% of millennials order food or eat out at least once or more than once a month, said the Deloitte report.

Hungry for options

It's not just necessity that drives millennials to spend on eating out. Many like to experiment with new cuisines and centre their social interactions around food. "The entire culture of eating out or going out in the evening has developed over the past 15 years or so. Delivery services like Swiggy played a very significant role in this. They eliminate the time barrier, and guarantee that you will receive food by a particular time," said Poorna Banerjee, a Kolkata-based food writer and restaurant critic.

A report by FICCI and Technopak, Indian Food Services Industry: Engine for Economic Growth & Employment, published in 2017, estimated that a higher share of consumer discretionary spends was being absorbed by eating out and ordering in, a trend which the report predicted would strengthen in the following five years. In 2017, 17% of discretionary spending was made on eating in restaurants and ordering food. The report projected it will reach 19% by 2020.

The report also said this is a direct result of the fact that a large share of the young working population are individuals who are well travelled and have double income households. They are experimental when it comes to food, tech savvy, and are eating out more often than earlier generations. But what they might be ignoring is how much their food bills are adding up to.

Preserving the budget

While they like to indulge their cravings, many millennials are becoming more conscious of their health. "They are mindful about what goes into their food. Insisting on organic and fresh ingredients is not a fad. It's a sign that they are aspiring to have a better lifestyle," said Banerjee.

But does this carry over to financial health? "Earlier there would be only a few restaurants to choose from and one would have to make the trip to eat at them, so there was more thought going into it. Now you have the choice of different restaurants, it's easy to order everything from breakfast to snacks. But the expense of eating out and ordering from restaurants can add up really fast. Often people don't notice and end up spending as much as they would on a car or bike EMI," said Piyush Khatri, founder, Sahastha Financial Consultants.

Beriwal was shocked to learn how much she was spending on her "occasional" treats. "I wasn't saving anything at all, so I decided to draw up a budget. I realised that I was spending ₹2,000- 4,000 a week on ordering food. I had no idea it was adding up to that much," she said. Some delivery services also levy a small delivery charge. While it might seem negligible, this too can add up. Say you pay a delivery charge of ₹30 on each order, and order five times a week, you'd be paying ₹600 a month just as delivery charges. Over a year, it can add up to ₹7,200 or more, depending on how often you order.

It might be too difficult to resist the temptation to treat yourself to that chocolate fudge after a bad day, but there is a way to protect your finances. And the best way to do that is to follow a simple rule: keep non-disretionary spends like house rent, utility bills on top; savings next; and then the leftover pie is for you to have it and eat it too!

"If you're a young professional living alone or with flatmates, and you don't like cooking, it's better to hire a cook. Paying a cook and buying all the groceries you need will be cheaper than ordering out regularly," he said. In most metros, you will spend around ₹7,000-8,000 a month on buying groceries, and another ₹2,000-4,000 as salary for your cook. It can vary depending on what you eat and where you live. If, on the other hand, you decide to order three meals every day for a month, even with a relatively low bill of ₹250 for each meal, you would end up spending around ₹22,500, about twice the expense of organising food at home, with a possible health issue thrown in.

Whether it's driven by necessity or the desire to sample a new cuisine, the outcome of overspending on food is the same. It can snowball and put a significant dent in your finances over a period of time. Draw up a budget and track your spends to keep a tab on it.

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