“The value of the global food market is $324 billion.”
When I decided to launch a company, I started with choosing the industry. At that point in time, the food industry in Europe and the US was growing. I thought there was potential there and the numbers were proving my observations.
I realised that the online food delivery service had potential in Ukraine. There have already been other similar services on the market, but I wanted to offer something that would be better.
Having competitors is, in general, an advantage, not a disadvantage. When you don’t have any, you shape the market at your own expense. But if there is no monopoly, you can easily launch a business and start competing with other players.
In June 2013 I put together the concept and the idea of the service, and in July, as soon as the business plan was ready, I approached Chernovetskyi Investment Group for funding. After a series of negotiations, I managed to attract funding for the business.
It took us a while to decide on the trademark. At our final meeting, we had 20 options and we eventually chose Eda.ua. We found it beneficial that it was easy to remember and it directed customers straight to our web platform. It is much easier to type Eda.ua directly into the address bar than to search through google and other services.
We first tried to work with a design studio and we reviewed over 1000 options of our potential future logo, but none of them was really suitable. Eventually, we decided to outsource the design work to freelance specialists. There was only one concept that we liked out of all the options, and it was a hidden spoon inside the letter “e”. You can find it if you look closer at our current logo.
One year later we held a contest and asked customers to find the “spoon” on our website. There were so many ideas: people kept looking through the photos of different meals, reviewed the texts and finally found it inside the logo.
Traffic channels testing
Over a 3 months period, we had been testing different traffic channels. As we expected, contextual advertising turned out to be the most efficient tool to attract our target audience. We bet on teaser ad’s but its conversion was very low, so we didn’t get enough return on investment.
We have roughly defined two types of ads that we focused on: conversional (to convert leads into the orders) and branding (to increase our brand awareness). Currently, we invest in both of them and we are constantly searching for new channels.
For instance, recently we have been testing advertising on the tube. The way it works is when users connect to the wifi in the underground, they get referred to our short ad. We have already received orders right from the tube, however, we believe that this type of advertising mostly contributes to our image.
“Commission for the restaurants is up to 20% of the total amount of orders”
We started working with restaurants and closed the first deals without even having a website. There were 4 managers in the team back then. They would present the previews of our website to the restaurant owners and explain the process behind the service.
We immediately implemented up to 20% fee for restaurants that also depended on a number of orders. Our cost remains quite standard. Similar marketplaces, like the UK web platform Just Eat and Delivery Hero in Europe, GrubHub in the US or Delivery Club in Russia are following the same model. There is no cost for the users.
Our partnerships with restaurants are aligned with the legal requirements, we sign standard type of agreements. There are around 1100 partners currently on our website. Many of them work with us exclusively, which means they do not promote their offers through any other online platform.
Users behaviour on the platform Eda.ua
Our main user group consists of people aged 18 to 35. 43% of our clients are men, 57% are women.
We defined 4 user behaviour scenarios:
- I know what I want to order and in which restaurant;
- I know what I want to order but I am not sure in which restaurant;
- I know where, but I am not sure exactly what I want;
- I don’t know where and what.
We constantly monitor our users’ behaviour: page sessions duration, bounce rates, direct traffic channels etc. For that reason, we never stop working on internal, as well as external, optimisation.
The most recent thing that we did to increase the organic traffic was adding the pages for city neighbourhoods and pages for the different categories on the menu (e.g. “pizza with chicken”, “pizza with mushrooms”, etc.). By doing this, we added a few thousand extra pages into the index.
Conversion statistics by channels
There are 3 ways in which people use our service:
- Website (desktop and mobile versions) — 55% of all orders
- 24-hour call centre (people order food via the phone) — 11%
- Mobile app (Android and iOS) — 34%
The website statistics look this way: 74% of the clients use a desktop version, 26% use a mobile one (which represent 40.7% and 14.3% of all orders respectively).
Our call centre has multiple functions, it is not only designed to take orders, but also to assist with their processing. Our agents pass the orders to the restaurants via text messages and emails. The order information is also automatically displayed on the individual restaurant’s profile.
After making an order, the customer receives a text with the confirmation and an email with the order breakdown.
The time limit for a restaurant to pick it up is 10 minutes. If they don't accept the order during this time, the call centre team gets in touch to find out the reasons.
An interesting conclusion is this: if we sum up the percentage of orders made through the mobile version of the webpage (14,3%) and with smartphones (34%), we can see that in Ukraine half of the orders are made with mobile devices.
Eda.ua app for smartphones and smart watches
We wanted to release the mobile app as soon as possible. However, we decided not to launch it together with the website, because we wanted to test our business processes first to see how the users will perceive us and how the restaurants will process the orders.
We had the app ready in October 2014. One week later it was available in Google Apps and it took 3-4 weeks for it to be released in the App Store. It is worth mentioning that App Store release process may take up to 1-2 months due to multiple testing rounds.
To analyse the mobile traffic we use Google Mobile Analytics tools, Flurry (behavioural factors analysis) and AppsFlyer (marketing budgets assessment).
Setting up the process correctly allowed us to receive 18% of the orders from this source almost immediately. By the end of August 2016 we had reached 34% and we plan to increase this number to 50% during the next 6-12 months. It is realistic.
We were the first company in Ukraine (and the second in the world) to build a food order app for the Samsung Gear S2 watch. For now it’s a strategic move as smartwatches are only just becoming popular in Ukraine.
Unique selling points of Eda.ua marketplace
In terms of competitive advantage marketplace Eda.ua has a number of UVPs:
- Group orders
- Office lunches
- Cross-selling online
- Ordering products from niche stores
Our functionality allows multiple users to make a real-time order together. One person has to create a group order. We then generate a link which can be easily shared with other people. Everyone can access the system with the same link and choose their own meals from the menu. We were the first company in the world to come up with such a solution.
These orders are 2-3 times cheaper than individual orders (from $1-2 per lunch) because they are considered to be complex lunches. People normally order office lunches for the whole upcoming week through our website, we then generate the list of orders for the next day on the daily basis.
These are relevant recommendations generated whilst the customer is making an order. This is a unique value proposition. Normally marketplaces in the food industry only practice offline cross-selling: the contact centre manager that you are on the phone with will suggest that you add a drink or a salad to complete the order. We designed the software that allows cross-selling online.
Products from the stores
We are scaling the business, so we now offer online groceries shopping on the web-site as well. We partner with niche stores for this programme and it allows people to order confectionery, delicatessens, farm products, etc.
Our competitors are not only other aggregators, but also the restaurants (as one can order directly from them as well). However, the time saving and the variety of offers we have incentivises users to choose our service.
Amongst our benefits:
- Loyalty programme
- Rewards system
- Gift certificates
Through our loyalty programme clients can receive and collect points. They are awarded after you complete the sign-up process, make an order, provide feedback, etc. Accumulated bonuses can be exchanged for free meals in the restaurants or for the gifts from the catalog.
After the first purchase Eda.ua clients participate in a lottery. We offer people to play a quick game and blindly choose a gift. Additionally, users receive a discount on their first order via the mobile app and on every third order through the website.
One can order gift certificates of different denominations (from $8 to $30) which can be used in 9 cities around Ukraine.
To conclude I want to add that the idea, the concept and the business model of the marketplace Eda.ua have all been thought through in the smallest details. The US Dollar exchange rate in Ukraine increased by 75% between 2014 and 2015. Prices in the restaurants increased by 23% during this period of time. Our service, however, hasn't been affected by these disruptions because the financial risk had been calculated from the start. So my advice is: when you launch a startup, make a pessimistic forecast. If it doesn’t become the case, you will only be better off.