Food Safety and Standards Authority of India (FSSAI) to Monitor Online Food Ordering

The apex food regulator in the country Food Safety and Standards Authority of India (FSSAI), has planned to regulate the quality of food which is ordered online

India: The constant rise of complaints from the consumers ordering food through online sales channel such as sale of expired food products has compelled the authority to step in by making e-commerce companies selling cooked food online avail licenses and making them register with the regulator.

This two-pronged approach taken by the regulator has been welcomed by ecommerce companies such as Foodpanda, who are also keen on developing the situation by working on food hygiene by promoting their own initiatives like the Food Doctor Programme. Other companies like Bigbasket, Snapdeal, Grofers, and Freshmenu have also agreed to adhere to the policies and regulations set in place by FSSAI and have decided to rethink their business models and keep their supply chain in check.

According to TechSci Research, E-commerce is a diversifying industry in India, the high penetration of internet services and improving quality of services are the two major reasons behind the growth of the industry. FSSAI has stepped in as a regulator for keeping the quality of the food and services in check to ensure the smooth flow of the industry as well as safeguard the interest of the consumers. Moreover, many consumers on citizen engagement platform – LocalCircles – have demanded that ecommerce sites should mandatorily disclose the manufacturing and the expiry date of packaged food products.

According to a recently published report by TechSci Research “India E-commerce Market Forecast & Opportunities, 2020”, the country’s e-commerce market is projected to grow at a CAGR of more than 36% during 2015-2020. E-services segment, which comprises online travel, online payments, online classifieds, etc., is expected to continue its domination through 2020. However, the e-tail segment that includes electronics, apparels & accessories, health and personal care, etc., is expected to witness significantly higher market growth compared to e-services segment over the next five years.

According to a recently published report by TechSci Research  “India Foodtech Market Forecast and Opportunities, 2011 – 2021”, the foodtech market in India is projected to grow at a CAGR of over 12% during 2016 - 2021. Over the last couple of years, the country’s foodtech market has been witnessing huge fund inflows from domestic as well as foreign investors. On the basis of operation type, the market has been segmented into two categories, namely, food aggregators and restaurant based. Among these categories, restaurant based segment dominated the overall market in 2015, and the segment is anticipated to maintain its dominance over the next five years as well, owing to consumer loyalty and frequent cashbacks/discounts offered by the companies.