How Domino’s stole a big slice of the food delivery market from Swiggy & Zomato with its delivery app
Indians love Domino’s, and Domino’s loves India! After all, with over 1500 outlets in the country, India has emerged as the biggest market outside the US for Domino’s. Since launching in India in 1996 (the same year that Pizza Hut was launched in India), the pizza chain has tasted immense success in the country. Domino’s was able to outpace Pizza Hut, its primary competitor in the market, despite entering the market at nearly the same time. Today, Domino’s has nearly 3 times the number of outlets in India compared to Pizza Hut. It has emerged as the largest pizza chain in the country. However, the company is not sitting on its laurels just yet - it has set its sight on the online food delivery market and plans to beat the duopoly of Swiggy and Zomato by growing its own delivery app. With over 57 million downloads so far, the pizza chain’s app has become a viable alternative to Swiggy & Zomato. This is the story of how Domino’s stole a big slice of the Indian food delivery market!
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Ever since opening its first outlet in New Delhi in 1996, Domino’s has been able to outperform its rivals like Pizza Hut, Papa John’s & a host of local pizza chains. The company partnered with Jubilant FoodWorks, a Noida based company incorporated in 1995 by Shyam Sunder Bhatia along with his brother Hari. Jubilant holds the master franchise for the Indian market, and has been a key partner for Domino’s to help capture the market. Domino’s used a three pronged approach to capture the Indian market - Localization, Affordability & Fast Delivery. The company has customized its product offerings in India in accordance with the local tastes & preferences as well as making sure that the pricing is well within the reach of the great Indian middle class. The 30 minute express delivery also played a key role in the rise of the pizza chain in India, as it did in its home market of the US. Thanks to these strategies, by 2019, Domino’s held more than 70% market share of the $1.5 billion pizza market in India! On the other hand, its main rivals, Pizza Hut & Papa John’s were struggling to keep up in the pizza wars. By 2017, Papa John’s exited the Indian market, closing down 66 outlets in the country. Pizza Hut’s footprint has remained relatively small compared to Domino’s, despite entering the market at almost the same time.
After conquering the pizza market, Domino’s has not set its sight on the food delivery space as well. In 2016, Domino’s became one of the first pizza chains to launch a delivery app worldwide, thus positioning itself as an alternative to food delivery apps across the globe. Its ambitions were given a massive boost in the Covid-19 pandemic, as more and more people began flocking to the app during lockdowns. By July 2020, Domino’s app had surged past both Swiggy & Zomato in both app installs and sessions. By the last quarter of 2020, more than 50% of Domino’s sales came from its own app, while Zomato & Swiggy combined accounted for less than a quarter of its sales. Currently, the app has over 57 million downloads, thus breaking the duopoly of food tech giants in India! The company leveraged the pandemic and ensuing lockdowns to its benefit and built its online presence in the Indian market. The pizza chain remained operational during the entire lockdown, creating a detailed sanitation & hygiene policy to make sure there were no operation hazards. Furthermore, it created a vaccination promotional campaign, offering those who have got their jabs or plan to - in short, everyone - discounts of up to INR 400 over 4 orders combined.
Now that the pandemic has subsided, Domino’s plans to further solidify its position in the food delivery market by leveraging discounts & loyalty programs to wean more customers away from Swiggy & Zomato. Food delivery apps are already under scrutiny with NRAI (National Restaurants Association of India). Over 5 lakh members of NRAI have filed a complaint with CCI (Competition Commission of India) citing the exorbitant commissions being charged by Swiggy & Zomato cutting into their profits. Domino’s already enjoys comparatively lower commissions charged by food delivery apps thanks to its dominant position in the market. Now, Domino’s is getting behind its loyalty program to become even less dependent on Swiggy & Zomato. It is offering deep discounts and other rewards that can only be redeemed on its app, thus driving more customers directly to its app. It is even contemplating shifting its entire online delivery business to its own app, shutting down its services on third party food delivery apps. This could be a big blow to both Swiggy & Zomato, both of which count Domino’s as one of its biggest restaurant partners. If their biggest partner becomes their biggest competitor, it could be a downhill battle for these venture funded companies that are already struggling to make a profit!