1. Estimating Market Size

Understanding the market size involves calculating the Total Addressable Market (TAM), Serviceable Available Market (SAM), and Serviceable Obtainable Market (SOM).

Total Addressable Market (TAM):

• The TAM represents the total revenue opportunity available if Foosty achieves 100% market share. For India, the entire food delivery market is estimated to be worth approximately $15 billion by 2025. This estimation considers the increasing internet penetration, rising disposable incomes, and changing consumer preferences towards online food delivery.

Serviceable Available Market (SAM):

• The SAM narrows the focus to the portion of the TAM targeted by Foosty, concentrating on urban and semi-urban regions where the demand for food delivery services is higher. Based on industry reports and market trends, this is estimated at $10 billion. Urban areas like Mumbai, Delhi, Bengaluru, and Hyderabad, along with emerging tier-2 cities, contribute significantly to this figure.

Serviceable Obtainable Market (SOM):

• The SOM represents the realistic share of the market Foosty aims to capture within the first five years. Assuming an aggressive yet achievable market penetration strategy, Foosty targets to capture 10% of the SAM, which is approximately $1 billion.

Top-Down Approach:

• Industry reports and data from market research firms (e.g., Statista, Nielsen) provide an overall estimation of the market size. By analyzing the growth trends and current market leaders' performance, we estimate that the Indian food delivery market will grow steadily, driven by urbanization and lifestyle changes.

Bottom-Up Approach:

• Calculating from the ground up involves estimating the number of potential users, average order value, and order frequency.
  • Potential Users: Approximately 150 million people in urban and semi-urban areas.
  • Average Order Value (AOV): ₹400 per order.
  • Order Frequency: 4 times per month.
  • Potential annual revenue = 150 million users * ₹400 * 4 orders * 12 months = ₹288,000 crore (~$36 billion). With a conservative market penetration rate, this supports our SAM and SOM estimations.

2. Detailed Competitor Analysis

Key Competitors:

1. Zomato:
   • Strengths:
     • Strong brand presence and recognition.
     • Extensive restaurant partnerships and variety.
     • Successful acquisition strategy (e.g., Uber Eats India).
   • Weaknesses:
     • High delivery fees, especially during peak hours.
     • Occasional service inconsistency in smaller cities.
2. Swiggy:
   • Strengths:
     • Fast and reliable delivery services.
     • Wide geographic coverage including tier-2 and tier-3 cities.
     • Innovative features like Swiggy Go and Swiggy Genie.
   • Weaknesses:
     • Higher costs for premium services.
     • User interface issues were reported by some users.
3. Uber Eats (before exit):
   • Strengths:
     • Leveraged global experience and technology.
     • User-friendly app with a seamless experience.
   • Weaknesses:
     • Limited localization to Indian market needs.
     • Intense competition led to the exit from the Indian market.

Market Positioning:

• Zomato: Positioned as a premium service with a focus on a wide variety of restaurants and high-quality user experience.
• Swiggy: Known for its fast delivery and wide coverage, including innovative hyperlocal services.