This week, Coca-Cola India picked up a 15% stake in Thrive, a foodtech platform for food ordering and delivery. So, in today’s Finshots, we look at whether Thrive can knock Swiggy and Zomato off their perch.

The Story

Imagine it’s 2010. You’re craving some food. What do you do?

Probably turn to the bunch of pamphlets on your coffee table, right? The ones that restaurants left on your doorstep. You’d sort through these physically and call up the number printed on the pamphlet. But there was a caveat — we couldn’t just order 1 samosa if that’s what we wanted. The restaurant would scoff at your request because there was no way they’d send their one delivery person for this tiny order.

By the time the mid-2010s rolled around, everything flipped. The Swiggys and Zomatos of the world emerged. They aggregated restaurants. They took care of delivery at a small fee. They brought convenience to our fingertips. A scroll here. A search there. We’d get the menu we desired. We could even order that solitary samosa.

It was a bonanza for smaller restaurants too. It helped with ‘discovery’.

Because earlier they’d either have to send people to distribute pamphlets. Or they’d have to hope that people who saw their brick-and-mortar outlet during an evening walk would stop to pick up a pamphlet. And then go back and ring the phone when they wanted something.

But aggregators opened up a whole new audience that could scroll and find new restaurants. It helped restaurants grow their business. Our pamphlets disappeared.

Everything was going great for a while. But nothing good lasts forever, right?

Restaurants began to hate the 20–30% commission they paid the aggregators. They began to feel they were being fleeced. So they simply inflated the prices of the menu on Swiggy and Zomato. You’d pay ₹100 for a dal fry if you called up the restaurant. But it might set you back ₹125 if you ordered using the aggregators.

Obviously, people noticed. They weren’t happy. They didn’t blame the restaurants. But they complained about the aggregators. But because they were hooked on convenience, everyone just went on with their lives.

Restaurants had another problem too. They realized that they had a loyal bunch of customers. But they didn’t know who these folks were. Or what their ordering habits were. The platforms kept all of this customer data. Restaurants were simply cooking in the dark.

They wanted a way out. And a few startups noticed this. So when the pandemic hit and everyone and their grandmother began to order food online, they went all guns blazing to disrupt the status quo.

Enter Thrive*.

Now Thrive decided to keep things simple. They decided to be a tech company and do nothing else. They’d offer a platform to restaurants to build their own micro-websites that could accept food orders. Thrive integrated third-party logistics companies into the mix for delivery. They’d even provide marketing tools for the restaurants to roll out offers and reach more people. It was Software-as-a-Service (Saas). And restaurants would have complete access to their customer data too.

Their proposition to restaurants was — “We’re giving you control of your business. Oh, and we’ll only charge a 3% commission!”

Yup, 3% versus the 20% charged by Swiggy and Zomato! Sure, there’s a bit extra for the marketing features, but the idea clicked. And in just two years, Thrive claims to have helped 14,000 restaurants already. Primarily in Mumbai for now.

But is Thrive ready to displace Zomato and Swiggy yet?

For that, Thrive needs customers to fall in love with it too. And as one review on the Android store points out, there are a few hiccups.

Firstly, since restaurants get access to your contact information, you could be spammed quite a lot more. I mean, just look at what D2C brands have done of late. I’ve been constantly spammed on WhatsApp. And it got so annoying after a point that I had to block each and every one of those chats. In fact, this irritant could even dilute customer loyalty.

Secondly, most restaurants won’t build out their own fleet. They’ll use third-party delivery companies. And when restaurants delay orders, these delivery folks aren’t going to be pleased. After all, their business is not just delivering food. It could be picking up and delivering documents too. Delays could potentially eat into their earnings. And that might translate into poor customer service.

Also, who’s in charge of customer service if an order is delivered wrong or late? Will customers blame the restaurant, Thrive, or the third-party delivery company? After all, with Swiggy and Zomato, we simply blame them.

Thirdly, and this is quite interesting. The reviewer says that the restaurants often fail to update their menu. That’s a problem because the customer orders an item, pays for it, and then gets calls saying, “Sorry, but we don’t have this item anymore. Can we refund the amount?”

Why does this happen?

Well, maybe because restaurants still don’t get a bulk of their orders through these direct platforms. Most of it still comes from Zomato and Swiggy. And if there is no central system that can update inventory across all platforms, it can lead to delays and confusions. They might forget to make the change on their own website. And it might end up creating a poor experience for the customer.

Anyway, we don’t know if this is really the case. Because Thrive’s response to the review was to just thank the person for ordering directly.

So with all these niggles, why on earth has Coca-Cola India invested its monies in Thrive?

Well, the primary theory seems to be that Coca-Cola thinks this is the perfect opportunity to bundle its beverages with the food. Get people to order its fizzy drinks and juices exclusively. After all, one of their core strategies seems to be to get people to pair its beverages with meals more often. At least that’s what the company said in a presentation recently. And Thrive seems to fit into that strategy perfectly.

And maybe there’s a couple of other things too.

For starters, people tend to spend more on these direct orders. As per The Ken, discovery-led purchases have an average order value (AOV) of ₹250–300. On the other hand, when people order from restaurants directly, they spend around ₹800–900 on average. It’s a bigger, planned purchase. And restaurants love a higher order value. And if this trend continues, a 3% commission on ₹900 is more exciting than 3% on ₹300, no?

But more importantly, Thrive seems to be avoiding a lot of costs that drag foodtech companies down. It’s not splashing cash on acquiring customers — that’s the restaurant’s headache. It’s not spending on delivery personal either — that’s for someone else to handle. Thrive only has the tech costs. And maybe that’ll mean we finally have a foodtech company that’s profitable?

Seems quite enticing for any investor, doesn’t it?

Anyway, it’s still early stages and we don’t know how this will shape up. But one thing we can say is that the food delivery wars is only going to get even more interesting. Especially since Thrive has even launched an app now to help with ‘discoverability’. It’s stepping right on Zomato’s and Swiggy’s turf.

Do you think Swiggy and Zomato will face the heat from Thrive? Don’t forget to write to us and let us know!

Until then…

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*Thrive isn’t the only one trying to disrupt the incumbents. There’s also DotPe which is backed by Google and Peppo.

‌Ditto Insights: Why Millennials should buy a term plan

According to a survey, only 17% of Indian millennials (25–35 yrs) have bought term insurance. The actual numbers are likely even lower.

And the more worrying fact is that 55% hadn’t even heard of term insurance!

So why is this happening?

One common misconception is the dependent conundrum. Most millennials we spoke to want to buy a term policy because they want to cover their spouse and kids. And this makes perfect sense. After all, in your absence you want your term policy to pay out a large sum of money to cover your family’s needs for the future. But these very same people don’t think of their parents as dependents even though they support them extensively. I remember the moment it hit me. I routinely send money back home, but I had never considered my parents as my dependents. And when a colleague spoke about his experience, I immediately put two and two together. They were dependent on my income and my absence would most certainly affect them financially. So a term plan was a no-brainer for me.

There’s another reason why millennials should probably consider looking at a term plan — Debt. Most people we spoke to have home loans, education loans and other personal loans with a considerable interest burden. In their absence, this burden would shift to their dependents. It’s not something most people think of, but it happens all the time.

Finally, you actually get a pretty good bargain on term insurance prices when you’re younger. The idea is to pay a nominal sum every year (something that won’t burn your pocket) to protect your dependents in the event of your untimely demise. And this fee is lowest when you’re young.

So if you’re a millennial and you’re reading this, maybe you should reconsider buying a term plan. And don’t forget to talk to us at Ditto while you’re at it. We only have a limited number of slots everyday, so make sure you book your appointment at the earliest:

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3. Select Term Insurance

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