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BEMM384 International Business Plan (A, TERM3 2022/3)

Coursework: Individual Business Plan
Submission Deadline: Fri 23rd Sep 2022 12:00
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Word count: 10226
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 HELLO-FRESH
BEMM384: INTERNATIONAL BUSINESS PLAN

WORD COUNT: 10,226 words

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 TABLE OF CONTENTS
SR NO CHAPTER PAGE NO

1.0 Executive Summary 5

2.0 Company Background 7

2.1 Company History 7

2.2 Mission Statement 7

3.0 The Marketing Environment 9

3.1 Microenvironment 9

3.1.1 Suppliers 9

3.1.2 Marketing Intermediaries 12

3.1.3 Competitors 13

3.2 Macro environment 18

3.2.1 Political Factors 18

3.2.2 Economic Factors 20

3.2.3 Socio-Cultural Factors 22

3.2.4 Technological Factors 25

3.2.5 Ecological Factors 26

3.2.6 Legal Factors 27

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3.3 SWOT Analysis 28

3.3.1 Strengths 28

3.3.2 Weaknesses 28

3.3.3 Opportunities 29

3.3.4 Threats 29

4.0 Segmentation, Targeting and 30

Positioning
4.1 Target Market 30

4.1.1 Demographic Characteristics 30

4.1.2 Psychographic Characteristics 33

4.1.3 Benefits Sought 34

4.1.4 Usage Rate 34

4.1.5 Geographic Location 35

4.2 Product Characteristics 35

4.2.1 Brand Name and Product Name 35

4.2.2 Features and Benefits 36

4.2.3 Points of Differentiation 38

4.2.4 Communication 41

5.0 Financial Considerations 43

5.1 Price Strategy and Competitive Position 43

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[Link] Profit Maximization Strategy 43

5.1.2 Comparative Pricing Strategy 44

5.2 Market Share 45

5.3 Sales Forecast 47

6 Summary 50

References 51

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1.0) EXECUTIVE SUMMARY
OPPORTUNITY IDENTIFICATION

HelloFresh is one of the most popular subscription-based meal-kit services in the world. The
goal of this business plan is to do a geographical diversification of HelloFresh in India. The
aim of this report is to meet the aims and objectives of the business in expanding its
geographical market further east to include India as a market to invest in. India is the 4Thfastest-
growing economy in terms of GDP surpassing the UK to become the 5th largest economy in
the world (Outlook Business Team, 2022). It’s a good opportunity of HelloFresh to leverage
this opportunity to exploit a new market which will help it in improving its brand image. The
online food delivery business has grown during the COVID-19 pandemic. Due to grocery shops
and supermarkets being shut down, meal-kit businesses saw a growth in sales and revenue
especially big players like HelloFresh, Blue Apron, etc. This business plan will give Hello-
Fresh to explore India as a big market for its meal-kit business.

AIMS AND OBJECTIVES

The most important objective of this business plan is to provide a healthy and nutritious meal
alternative to ordering from restaurants or food outlets in India. This business plan can achieve
this objective by penetrating the online food delivery market dominated by food aggregators
like Zomato and Swiggy. After seeing success in American, European and Australian markets
its time for Hello-Fresh to try investing in the Indian food market. Hello-Fresh will offer its
subscription based service consisting of meal-kit recipes packed with recipes in boxes which
will be delivered directly to the customer once they have subscribed to a plan. This business
plan’s aims and objectives are in line with the company’s mission statement (changing the way
people eat forever). One of the aims of this business plan is to create a disruption in the food
delivery market shifiting customers from platform based food aggregators like Zomato and
Swiggy to Hello-Fresh. Another focus of this business plan is to provide flexibility and
convenience to its customers which will save them time on grocery shopping and will reduce
wastage of ingredients by packing portioned ingredients for each meal. This way there will be
less food wastage and a sustainable business plan will find its place in the major cities of India.

This business plan aims to offer meals that are vegetarian and meat-free.

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Providing a diverse variety of recipes is a good way for this business plan to be successful in a
diverse country like India where the cuisine changes every couple of miles. Its recommended
that the business should aim to provide recipes which are a staple meal of the city in which
they are conducting business for eg: Pav Bhaji in Mumbai, Idli Sambhar in Bangalore, etc. It
can include some Indian sweets during festive seasons like Diwali, Holi, Eid, etc. Examples
include rasgullas, gulab jamun, barfi, laddoos, etc.

Discount offers on the first three orders and festive seasons will aid in increasing the sales
numbers for this business plan. This business plan aims to establish Hello-Fresh as a healthy
alternative to restaurant dining and takeaway.

One of the main aims of this business plan is to encourage cooking among the target audience
especially males who are generally confused about the portion sizes for meal prepping. Hello-
Fresh offers a viable solution to this problem by fixing the exact quantity required to prepare
the meal.

Hello-Fresh will also offer meals considering the dietary requirements of its customers.
Customization will available for meals in terms of being gluten free, sugar free, etc.

TARGET MARKET

This business plan aims to target bachelors and working professionals in the age group of 25-
34 in cities who cannot spare time for grocery shopping visiting supermarkets and local
vendors. This business plan will provide them with the infrastructure to pre-plan their meals
for the week with a monthly subscription plan to fix the number of meals that are required
ranging from 2,4,6 and 8 meals each week. It will also enable the audience to customize their
meal kits to meet their ideal diet requirements.

Working professionals and bachelors living in cities of India have a hectic lifestyle throughout
the week. Lack of fixed working hours in most professions it’s very hard for people to have a
work life balance in these settings. This is where Hello-Fresh comes to the aid of its customers
to provide boxes on a timely basis so that the hassle of planning and preparing meals is taken
care of. Its also ideal for students who are staying in hostels studying for professional or
competitive exams like UPSC, Chartered Accountancy,etc. Living away from family can be

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difficult especially in big cities like Mumbai. Being able to order on the go will help free a lot
of time in the schedule of these students.

This business plan will also be beneficial for customers who follow a healthy and active
lifestyle by pursuing hobbies like cycling, swimming, hiking, etc. Preparing and packing meals
becomes easier while pursuing hobbies at the same time.

Being in a growing industry like platform based online food delivery will help Hello-Fresh to
grow its business in the long-term with the Indian economy growing a fast pace.

2.0) COMPANY BACKGROUND

2.1 COMPANY HISTORY

Hello-Fresh is a meal-kit company which is based in Berlin, Germany (Wikipedia, 2022). It is a

subscription based service. It’s one of the world’s first companies to come up with the
innovative concept of weekly meal-kit delivery service. It was established in November 2011
by Dominic Richter, Thomas Griesel and Jessica Nilsson. The company went public for the
first time in November 2017 on the Frankfurt stock exchange. It has a good geographical reach,
particularly in Australia, European and American markets (Hargreaves Lansdown , n.d). It also
packages its products in a sustainable manner and reduces its carbon footprint on the
environment. Hello-Fresh is a sustainable business with a focus on developing an
environmentally friendly solution. This business plan will help achieve two objectives for the
company in the Indian grocery market, developing an economically friendly alternative to
buying groceries from other retail supermarkets and also promoting a sustainable and unique
business to help serve the general public better. Its target market will be majorly comprised of
bachelors and the working-class population in major Indian cities who do not have the time to
go grocery shopping frequently.

2.2) MISSION STATEMENT

“We change the way people eat forever” (Hello Fresh, 2022).

It aims to provide households in its 9 markets an opportunity for enjoying home-cooked meals
which are wholesome and easy to cook. It gives a platform to enjoy cooked food which is made
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from fresh ingredients directly sourced from the farms without any intermediary stoppages at
warehouses or supermarkets. The merits of having a subscription involve far less planning for
making food and eliminating the hassle to shop for groceries time and again. I feel that the
overall mission statement of the company is good enough for marketing its service in European
and other western nations, but for the Indian markets, it would be better to frame a mission
statement in Hindi as well as English, since Hindi is the most widely spoken language
especially in states like Rajasthan, Uttar Pradesh, Himachal Pradesh, Uttarakhand, etc in the
north of India. However, in southern states like Kerela, Tamil Nadu, Karnataka, Andhra
Pradesh, etc its better to have a mission statement in English as the majority of the local people
in these states do not speak Hindi.

Fig 1: The Hello Fresh logo along with the meal-kit recipe box (Forman, 2021).

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3.0) THE MARKETING ENVIRONMENT

3.1) MICROENVIRONMENT

3.1.1) SUPPLIERS

Supply chain in the UK and other current markets

Hello-Fresh procures the ingredients for its recipes directly from the suppliers. Ingredients like
vegetables, meat, sauces, spices and milk and milk products are procured from the local sellers
in the marketplace. The supply chain of the Hello-Fresh group operates based on a sustainable
model which is more environmentally friendly compared to the traditional food supply chains.
It serves the product directly to the consumer with fewer intermediary stoppages in comparison
to traditional supermarkets. Hence, Market Intermediaries are barely involved in the supply
chain. Cost savings in terms of energy, electricity, rent and transportation enable the business
model to be efficient and sustainable. The company has a robust supply chain which goes
through various checks and balances (Hello Fresh , 2021):

• Supplier verification: It has a dedicated supplier onboarding process that screens

suppliers based on quality and sustainability assessments before procuring ingredients
for the customised meal kit.
• Algorithm-based supply chain: To ensure that there is minimum wastage and
optimum efficiency, HelloFresh has developed advanced algorithms to enable the
group to determine the demand for their recipes by way of customer orders. This helps
the company to minimize any wastage caused due to unsold stock by forecasting the
demand. This wastage is kept at a bare minimum in comparison to the traditional
supermarkets, food wastage is taken care of before it arrives the distribution centres.
• Lower wastages: In case of wastages which is as low as 1% of the total purchased
ingredients, edible ingredients are given in donations to local charities or food banks.
Some food banks across their markets include “Die Tafel” in Germany and “ Foodbank
Australia” in Australia. During the pandemic, HelloFresh made donations of up to EUR
3 million to food banks across the globe.
• Energy and cost savings: A vertical supply chain structure is followed by HelloFresh.
Ingredients are directly shipped by the suppliers to the meal-kit manufacturing

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facilities of HelloFresh. This saves a lot of the transportation costs and emissions for
the organization by not having to deal with the hassle of storing the boxes in a
warehouse and hence also at the same time, saving on space and cost of renting
warehouses. This also is an indicator of how sustainable their business model is in
terms of both, costs as well as energy.

Fig 1: HelloFresh follows the Pull concept instead of the Push concept adopted by traditional
supermarkets (Hello Fresh , 2021).

Development of a potential supply chain in India.

Hello-Fresh can partner with farmers to develop a meal-kit delivery service based on
the same supply chain structure the group follows in the UK. This potential will require
efforts on the part of the group to develop partnerships with local farmers and farmer-
producer organizations (FPOs) in different states of India. The group would have to
look into opportunities in backward integration developing a B2B supply chain
mechanism with the local farmers and FPOs. HelloFresh can take some insights by
following an agriculture food supply chain disruption model as discussed in this blog
(Kuchibhotla, 2021). Some ideas that could be looked into by the group:

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• The Indian agriculture market is monitored by APMCs (Agriculture Producing
Marketing Committees). Hello-Fresh as a group could register themselves as a buyer
and can then get in touch with the sellers of theagriculturale produce (the farmers or
mandis), bid for a price and procure the stock directly from them. The group can
register itself as a buyer through the e-NAM (National Agriculture Market) portal
operated by the Government of India.

• APMCs and local vegetable vendors should be targeted by Hello-fresh to develop a

supply chain. They can source ingredients (vegetables) for meal boxes through them.
However, in the case of ingredients like milk and milk products like cheese and paneer,
these could be sourced through local dairies and poultry farms. Packed milk from
Amul, a state government milk cooperative society could form a part of the meal kit.

Fig 2: The Amul logo (Express News Service, 2020)

• Develop appropriate IT infrastructure to assess the logistical availability of agricultural

produce using disruptive technology like Artificial Intelligence (AI) and Machine
Learning (ML) especially seasonal crops like Bajra, Wheat, Oat, etc. as per the
respective crop season. The main three cropping seasons in India are Kharif, Rabi and
Zaid (Tiwari, 2021).

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 • Spice forms an important ingredient in making Indian cuisines and hence spices will
form an important ingredient of the meal-kit recipes for Hello-Fresh in India. Top
masala (spice) brands in India include MDH, Badshah, Everest, Catch, Ramdev, MTR,
etc. (Wilson, 2022). Hello-Fresh should partner up with the best-selling brand across
India. By far the best-selling masala brands in India are Everest and MDH.

Hello-Fresh’s supply chain should include cheap delivery service providers. The company can
offer its services in major Indian metro cities like Mumbai, Bangalore, Chennai, Delhi,
Hyderabad, Kolkata and Pune. However, it would be difficult to establish a supply chain in tier
2 and tier 3 cities in the short term. The company could adopt a long-term vision based on its
short-term performance in tier-1 cities.

3.1.2) MARKETING INTERMEDIARIES

Since Hello-Fresh is diversifying itself into a new geographical segment, it will require
significant marketing to establish itself as a major healthy meal-kit alternative against its
competitors. Hello-Fresh is built on a DIY meal-kit business model which can give stiff
competition to rival aggregators by providing healthier food alternatives.

Hello-Fresh can use the already tested marketing strategies to market their recipes in major
metropolitical cities:

Influencer Campaigns on Social Media platforms: Hello-Fresh can rope in Indian health
and fitness influencers like Shilpa Shetty, John Abraham, Sahil Khan, Ranveer Allahbadia, etc.
according to the budget of the company (Pathak, 2022). Like they did in other geographical
markets, Hello-Fresh can adopt the same strategy of Influencer marketing for its target
audience in the Indian market consisting of working-class professionals and bachelors. Fitness
influencers can be good market intermediaries to bridge the gap between Hello-Fresh and the
consumer. Influencer marketing forms a major part of their marketing strategy. Hello-Fresh
has roped in famous influencers such as Jamie Oliver and Davina McCall. Being a famous
culinary chef, it was obvious why Hello-Fresh chose Jamie, his YouTube channel had around
2.5 million subscribers in 2015 (Bezemer, 2022).

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3.1.3) COMPETITORS

There is a wide range of online food delivery platforms. There are two types of online food
delivery platforms, “aggregators” and “new delivery players” (Rajko et al., 2016) which could
possess significant competition for Hello-Fresh in India. While both operate on the same basis
that allows the respective consumers to compare menus, place reviews and place orders from
restaurants, the difference lies in the way in which they offer this service.

Aggregators are more traditional in the sense that they were established earlier than the new
delivery players. Aggregators take delivery orders from customers and route it directly to the
restaurants or food outlets. The delivery is handled by the restaurants themselves. Examples of
aggregators which are famous globally include Delivery Hero, Foodpanda, GrubHub and Just
Eat.

New delivery players operate in a manner similar to the aggregators, they give consumers the
opportunity to compare and order meals from the restaurant through their respective website
or app. New delivery players also handle the logistics for the restaurant. This gives them a
competitive advantage that they can rope in higher-end restaurants that didn’t deliver

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previously. They share a fixed margin on the order with the restaurant as well as charge a small
flat fee to the customer. Famous examples include global brands like Foodora and Deliveroo.

Hello-Fresh faces stiff competition from rival meal-kit delivery services in the west, some of
the major rivals include Blue Apron, Gobble, Sunbasket, Dinnerly, Home Chef, Fresh n Lean,
Marley Spoon and Green Chef (Scalco, 2021). However, it has the most market share among
all its other competitors in 2021. In the early days of the COVID-19 pandemic, sales for Hello-
Fresh started rising, as people opted for subscription-based meal-kits to meet their daily meal
requirements.

Fig 3: Increase in sales of Hello-Fresh from 2019 to 2021 in US markets (Perri, 2022).

Hello-Fresh’s sales numbers outperformed its competition which in turn increased its market
share. Acquisitions of smaller meal-kit companies like GreenChef and Factor75 along with the
launch of EveryPlate as a lower cost alternative in 2018 also contributed to Hello-Fresh’s
increase in the market share. It has experienced a rise in sales from contributing to about 50%
among its competitors in 2019 to a market share of 69% in 2021.

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COMPETITION IN INDIA

In the Indian market context, Hello-Fresh will majorly face competition from online food
delivery companies like Zomato, Swiggy, Faasos, Uber-Eats, Food panda, Dunzo, Deliveroo,
etc (Statista, 2022).

MOST POPULAR FOOD DELIVERY COMPANIES IN INDIA AS OF

AUGUST 2021

0% 10% 20% 30% 40% 50% 60% 70% 80%

Zomato 75%
Swiggy 70%
Uber Eats 6%
Food panda 5%
Faasos 4%
Fast food delivery apps 2%
Dunzo 2%
Deliveroo 2%
Grub hub 1%
Others 4%

Fig 4: Bar graph demonstrating the market share held by the most popular food delivery companies in
India (Statista, 2022).

On the basis of the above bar chart, major portion of the online food delivery market is
dominated by two players, Zomato and Swiggy. Zomato leads this competition by having
around 75% of the market share closely followed by Swiggy at 70%. Other competitors do not
hold a significant market share, hence they are less likely to give stiff competition to Hello-
Fresh. Both companies operate based on the same business model. They have their respective
mobile apps which enable their customers to place orders online (Sinha , 2022).

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Fig 5: Picture of Zomato delivery drivers in a metro city of India (Wadhwa, 2021).

Initially starting as a platform for providing reviews and information about restaurants, Zomato
started taking online food deliveries. Launched in 2008, it gradually evolved to include online
table reservations and food delivery. It has partnered with big and small restaurants, shown
based on the area the consumer is in and then giving them a list of eateries from which they
can order. The app also shows reviews and comments of previous customers sharing their
experiences on the platform. On the basis of these ratings people can select the best restaurant
to order food from. Zomato also offers festive discounts and codes from time to time (Sinha ,
2022). Zomato had its Rs. 9,375 crore premium priced IPO last year, the food delivery giant
received a good response from the public. It has a wide network in around 525 cities in India
and an average of around 6.8 million customers who order food monthly. Zomato is valued at
around $8 billion (Wadhwa, 2021).

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Fig 6: One of Swiggy’s unique animated display advertisement (Visen, 2021).

Founded in 2014 by Nandan Reddy, Rahul Jamini and Sriharsha Majety, Swiggy initially
started its food delivery business in the city of Bangalore. Having a reach in 25 cities in India
and around 40,000 restaurants globally, it is quite popular in the online food delivery sector
(Sinha , 2022).

Hello-Fresh can compete with these companies if it curates its menu to include Indian cuisine
consumed on a daily basis like Dal, Rice, Wheat, Jowar, Bajra, Okra, etc. These dishes are a
healthy alternative to having restaurant food and this will make Hello-Fresh stand out from
Zomato and Swiggy.

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3.2) MACRO ENVIRONMENT

The macro analysis is carried out based on the Indian market, although some references are
made in the context of global trends and events that have taken place in recent times. Being in
the business of meal-kit recipes, all the sections of the PESTEL analysis will have a major
impact on the business of Hello-Fresh in India.

3.2.1) POLITICAL FACTORS

Political factors will have a major impact on the business of Hello-Fresh in India. There is
uncertainty in the political environment in India and the success of this business plan will
depend on the future policies and legislations implemented by the Government of India. In
2022, majority of the COVID-19 regulations have been lifted in major metro citites after the
omicron wave subsided (Das et al., 2022). Despite of having better pay and felixibity attributed
to the gig economy in developed economies like the UK, India is far behind in terms of better
pay and parity for gig workers like delivery drivers and bike riders. As most of the gig workers
are classified as unskilled and uneducated, this has also contributed to the dilemma (Parwez,
2022). However, Hello-Fresh would incur less labour costs in India as most of the gig workers
in India are classified in the category of self-employment and are treated as unskilled workers
(Gonsalves, 2019). Also major portion of the of the Indian economy is facing the problem of
unemployment. Hello-Fresh can benefit from this demographic dividend.

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Fig 7: The Goods and Service tax portal (GSTZen, 2021).

Another important fiscal measure to consider for Hello-Fresh is compliance with GST (Goods
and Services Tax) laws in India (ClearTax, 2022). Goods and Services tax is an indirect tax
levied by the central and state governments to goods and service providers. Before the
implementation of the Goods and Services Tax Act, 2017 the goods and service providers
needed to get separately registered under different acts of the parliament. However, after the
implementation of GST under the Modi government, businesses only need to get themselves
registered under the GST Act and they will be issued a GST number. Hello-Fresh will have to
apply for GST registration in different states on the basis of its annual turnover as it provides
goods in the form of ingredients as well as a service in the form of food delivery to its
customers, there are different limits on the turnover for goods and services for complying with
the registration criteria (Kanakkupillai, 2022). To adhere with the GST laws Hello-Fresh would
have to seek professional services of chartered accountancy firms to comply with the law and
file tax returns.

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Fig 8: An illustration of Aatma-Nirbhar Bharat (Agarwal, 2022).

An important political tool which needs to be taken into account is the Aatmanirbhar Bharat
(Self-Reliant India) programme announced by Prime minister Narendra Modi during the
backdrop of the COVID-19 pandemic. A special economic and comprehensive package of INR
20 lakh crores to fight the pandemic was announced by Narendra Modi on 20th May, 2020
(Wikipedia, 2022). The UK-India Business Council (UKIBC) has stated that a push for self-
reliant India would pose a threat to international trade flows and investment into India which
would isolate India from the global supply chain (Dhoot, 2021). A rise in tariffs and non-tariff
restrictions like quotas, embargos sanctions and levies would cause significant barriers for
Hello-Fresh to set up its business in India.

3.2.2) ECONOMIC FACTORS

The COVID-19 pandemic had a significant impact on the success of food delivery businesses
in India. There was a growth in digital infrastructure in 2020 due to the pandemic. More people
in India started using digital platforms like BigBasket, Grofers, Amazon Fresh and Jio Mart to
order groceries online especially in metro cities. People resorted to using mobile apps to order
groceries and due to a very large number of orders, delivery slots were assigned for different

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areas. It provided convenience and safety to people. Some of the factors that contributed to this
phenomenon are the rise in disposable income, consumer spending and urbanization of the
working population (Yelamanchili et al., 2021).

After the initial impact of the Omicron wave, the Indian economy is showing signs of
improvement. It is expected that the economy will have a growth rate of 7.1% to 7.6% during
the financial year 2022-23 (Majumdar, 2022). However, Russia’s invasion of Ukraine in
February, 2022 had a global impact which led to an increase in commodity prices and
disruption in transactions related to trade and finance.

Inflation has had a huge impact on the average Indian consumer, especially from low-income
households being disproportionately impacted. However, consumer confidence is improving
with easing of mobility restrictions. Inflation in India was primarily driven by high food prices,
followed by fuel prices that started rising in 2021. Hello-Fresh needs to take low-income
households into consideration before fixing the prices for recipes.

Fig 9: The value of online food delivery market is predicted to grow to 12.8 billion dollars by 2025
(Statista, 2022)

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The online food delivery market is expected to grow with work from home policies still
continued in some office workspaces.

One of the most important economic factors which may affect this business plan adversely is
unemployment. Since the target market for this business plan is working professionals and
bachelors, urban unemployment will specifically affect its success. India’s urban
unemployment rate had jumped to 12.6% during April-June, 2021 as compared to 9.3% in the
January-March quarter. Its also important to note that 25.5% of the urban youth belonging to
the age group of 15-29 remained unemployed in April-June as compared to 22.9% in January-
March, 2021 (Magazine, 2022).

3.2.3) SOCIO-CULTURAL FACTORS

The pandemic significantly changed the lifestyle factors pertaining to food choices of the urban
population. The most common method of ordering food items was through online platforms
like BigBasket and Jio Mart. Consumers food behaviours changed slightly from dine-in to
procuring groceries online, both in case of ready made food and procuring groceries for home
cooking (Kujipers et al., 2020). Its also interesting to note that the demand and spending for
take-out and delivery increased during and after COVID-19 outbreak.

However, sustainable and a health conscious lifestyle took precedence during the pandemic
due to which the success of this business plan is more likely because people have become more
health conscious post the initial period of the COVID-19 outbreak. Many people started
adopting healthy habits like Yoga, meditation, plant-based diet and consumption of healthy
food.

Hello Fresh can capitalise on the active lifestyle adopted by young professionals for the purpose
of this plan and implement a meal prep infused with ingredients which benefit their health.
Some examples include daily meals like lentils and rice, roti, biryani, pulao, okra, etc. This will
attract everyday office going professionals to order recipes which are based on the staple diet
of majority of the people.

Most of the urban population that order fall in the category of bachelors or working
professionals who have a busy schedule during the weekdays, so they would order food online.
Many of these people are young and fall mostly in the age group of 25 to 34 years (Statista,

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2022).

Fig 10: Bar chart showing frequency of ordering online on delivery apps by age group in India (Statista,
2022).

From the above bar chart, as per a survey conducted by Raukten Insight in August 2021 it can
be seen that most of the respondents ordered food once or twice a week.

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Fig 11: Bar chart demonstrating reasons to continue ordering online, one of the major reasons being
convenience (Statista, 2022).

Its interesting to know that the main reasons for continuing ordering food online even after the
lockdown was mainly convenience and time saving.

Making a larger business network to supply nutritious food to a target audience (25-34 year
olds) which is health conscious will make a good business plan for Hello-Fresh in India. Most
of the meal-kit providers who are catering to these customers are local and do not have multiple
branches Eg: CALORIECARE ([Link] Sampoorna Ahara
([Link] etc.

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It can be concluded that the most vital factors which affect the success of this business plan are
convenience and time saving. Hello-Fresh can enhance its market by offering healthy options
to health conscious people who are into fitness and health. As per a survey among young adults
in the age group of 15-34 year olds conducted by Statista in 19 states across India in 2016, the
majority of the respondents were non-vegetarians (58%) followed by vegetarians (30%) and
Egge tarians (9%) (vegetarians who consumed eggs) (Statista Research Department, 2022).

Fig 12: Bar chart showing the survey conducted in India among young adults on their diet preferences
(Statista Research Department, 2022)

3.2.4) TECHNOLOGICAL FACTORS

As technology is king in this day and age, innovation is very important for the success of this
business plan. In the UK, there are plant based food options Eg: taste like chicken (Subway),
plant-based chicken, taste like meat, etc. Plant based meats are designed in a manner to imitate
the taste and texture of meat (Lamas, 2021). Hello-Fresh can introduce some plant based

25
ingredients which taste like meat in their meal-kits which will peak the interest of their target
audience in India.

Although plant based meat is in the infant stages of development in India, its still showing
significant growth in terms of sales. It generated a retail sales of $220.8m in 2020 and is
expected to hit $292.9m in 2025 (Zachariah, 2022). Big FMCG companies are entering into
the plant based meat segment, one of the significant ones being Tata Consumer Product Ltd
(TCPL). TCPL has launched 4 variants under its new brand “Tata Simply Better” its plant
based meat products: Nuggets, Burger Patty, Awadhi Seekh Kebab and Spicy finger (ET
Online , 2022). It can target non-vegetarians and vegetarians alike who are looking for an
animal-protein replacement.

3.2.5) ECOLOGICAL FACTORS

Sustainability is one of the important agendas in the Hello-Fresh business model. One example
is its sustainable supply chain practice ensuring less CO2 emissions. It has been a practice for
the business to publish a sustainability report each year. The two key environmental targets of
Hello-Fresh for the year 2021 were: Reduce food waste sent to the landfill by atleast 50% per
euro of revenue earnt and reduce CO2 emissions from production facilities by 60% by the end
of 2022 (taking 2019 as baseline) (HelloFreshGroup & KPMG, 2022).

Sustainability is also a growing topic of interest among Indians. Majority of the Indians have
started purchasing items based on sustainability, a report from Capegemini Research Institute
examined the impact sustainability has on consumer purchasing patterns. About 79% of the
consumers are changing their purchase preferences based on social responsibility,
inclusiveness or environmental impact (Alves, 2020). Around 57% of consumers in the young
segment in the age group of 18-24 have changed their preferences to lesser known brands,
sustainability being the prime reason.

Hello-Fresh can adopt practises like minimising food wastage, reducing carbon emissions and
adopting recycling materials, it will get popularity among its target audience of young working
professionals.

26
3.2.6) LEGAL FACTORS

For this business plan to succeed, Hello-Fresh should ensure that the food regulations
established by the Government of India should be followed. Hello-Fresh should follow
compliance with the guidelines laid down by the Food Safety and Standards Authority of India
(FSSAI).

The packed ingredients procured by Hello-Fresh as a part of their recipes for their Indian
audience should follow the food certification marks like AGMARK for agricultural products,
FPO for processed fruit products like jams, the green or brown dot and Indian Organic
Certification to adhere with the National Standards for Organic Products which provides an
assurance that the products or raw materials used in the product are grown through organic
farming ( [Link] Research Team, 2019).

27
3.3) SWOT ANALYSIS

3.3.1) STRENGTHS

This business plan’s strength lies pre-dominantly in the way in which the online food delivery
service is provided by HelloFresh to its Indian customers. Strengths include the following:

• Recipes which are filling and good for the health are marketed by HelloFresh and since
the business procures its products sustainably, it will be popular among its consumers
who are majorly into health and wellness in India. Since the COVID-19 pandemic,
around 92% of Indians are concerned for the health and wellness of their family as
against the global average of 82% as per a report by EY India (BW Online Bureau,
2022).
• HelloFresh has a huge distribution network around Europe and the American sub-
continent including in some countries in Asian sub-continent. Its one the most popular
meal-kit providers in the world (Hussain, 2022). It has a strong brand image which
helps its case for this proposed business plan in Indian cities.
• Hello-Fresh’s meal-kits are cheap and affordable as compared to other competitors.
With 60% discount on the first box and subsequent 25% discount for the next 2 months
as part of the subscription based plan, makes it affordable option among frequent
consumers (HelloFresh Group, 2022). This along with free shipping is a good strategy
for initial penetration into the Indian market for the group.

3.3.2) WEAKNESSES

• HelloFresh will find it difficult to get initial working capital in India to set up its
business. The company will have to prove its credit worthiness among financial
institutions. It will face competition from Micro Small and Medium Enterprises, since
banks will prefer financing MSME’s over other entities. The government’s bid to save
falling revenues of MSME’s post the COVID-19 pandemic may make it difficult for
the group to get credit from financial institutions (Jain, 2020).
• Competition from local and online grocery chains like JioMart, BigBasket and Grofers
will be factor HelloFresh has to consider while penetration into a novel market like

28
 India where majority of the Indians prefer buying groceries from the local kirana stores
(Reuters Staff, 2021).

3.3.3) OPPORTUNITIES

• India is a growing economy, with bright future prospects for Foreign Institutional
Investors (FIIs). Also, since India has overtaken the UK to become the 5th largest
economy (Nolsøe, 2022), it offers HelloFresh a great opportunity to explore the Indian
market which is important for the group in order to expand its distribution network.
• The idea of having an ingredient based meal-kit delivery service in a geographical
market like India, gives HelloFresh a competitive advantage as this is a relatively new
business concept in India. However, the business may face competition from local
vendors and restaurant based food delivery services like Zomato, Swiggy, etc.
• Being the 2nd largest populated country in the world (O'Neill, 2022) with population
in tier 1 cities like Mumbai skyrocketing, HelloFresh won’t find it very difficult to find
first customers.

3.3.4) THREATS

• The meal-kit industry is yet to appeal a large population and is relatively new globally
(Team Linchpin, 2022). Introducing this business model in India would imply a
diversification in the preferences of the consumer who is not very used to the idea of
meal-kits, hence could be very risky.
• With each ingredient being packaged and pre-measured separately for each reciepe, it
could become difficult for HelloFresh to preserve them whist they are being supplied.
India lacks an infrastructure for cold storage (Pahwa, 2021) which could make it
significantly difficult for HelloFresh to store perishable ingredients.

29
4.0 TARGET MARKET, MARKET SIZE, SEGEMENTATION
STRATEGY, AND MARKET OPPORTUNITIES, PRODUCT
CHARACTERISTICS
On the basis of the market analysis, this business plan is designed to cater to the needs of the
people who are working professionals and bachelors. Flexibility being one of the important
intentions of HelloFresh, the meal-kit delivery service will appeal the most to single bachelors,
professionals and students who are looking to save time on grocery shopping and at the same
time want to eat healthy with portioned meals which are able to form a part of the staple Indian
diet. The focus of the business plan will be placed on the Indian market. This is because India
is a market with good growth protential and is a self-suffient in terms of agricultural produce,
spices, and other ingredients required to design the meal-kit to cater to the target audience.
Ceasing of lockdowns post the pandemic gives HelloFresh an opportunity to implement this
business plan in India and expand its business into new geographical markets.

4.1 TARGET MARKET

4.1.1 DEMOGRAPHIC CHARACTERISTICS

The key demographics used to identify target customers are: age, income and gender

A. AGE

More than 60% of the population in India is concentrated in the age group of 15-64 years
(O'Neill, 2022). Majority of this population is concentrated in the rural India which includes
villages and other interior regions. Around 506 million people are concentrated in urban India
which comprises of cities like Mumbai, Delhi, Kolkata, Chennai, etc. Online food delivery is
most used in India by users in the age group of 25-34 years (Statista Global Consumer Survey,
2021).

30
Fig 13: Users of online food delivery platforms in India segmented on the basis of age (Statista, 2022).

B. INCOME

Majority of the online food delivery services are used by people in the high income group,
about 39.8% followed by people earning medium and low income (Statista Global Consumer
Survey, 2021). There is an increase in home deliveries and take-aways among millennials, one
of the major reasons stated being convenience and time-saving (Cheng, 2018). More
urbanization, increase in working women , more younger population and higher disposable
incomes coupled with time constraints is seen in India (Goel et al., 2020).

31
Fig 14 : Online food delivery users in India segmented on the basis of Income (Statista, 2022).

C. GENDER

It is seen that the major number of online food delivery orders in India are placed by
males(Statista Global Consumer Survey, 2021). An interesting metric to understand the reasons
behind this is the number of males who participate in household cooking. As per The Times
Use Survey, around 84% of the women in India spend 80% of their work hours on household
chores for which they don’t get paid whereas the reverse holds true for men. Since males spend
most of their time at work, leaves them with less time to spare on household chores, only around
6.1 % of men participate in household activities like cooking (Moneycontrol News, 2020).

32
Fig 15: Users of online food delivery services in India segmented on the basis of gender (Statista, 2022).

4.1.2 PSYCHOGRAPHIC CHARACTERISTICS

HelloFresh will strive to have a broad target market including other age segments who are too busy to
go grocery shopping and who want a healthy and sumptuous meal, hence it will be in the benefit of
HelloFresh to target people who are healthy and follow a fit lifestyle. People who like exercising, going
to the gym, or indulging in outdoor activities can be a potential market apart from the working class
population. The target market can further be segmented into people following a sustainable lifestyle
and primarily having a vegetarian diet.

Based on their dietary preferences, its more likely for HelloFresh to market their products to people
who are vegetarians. Dietary preferences in India are often followed on the basis of religion.

In order for this business plan to be successful, HelloFresh should try and avoid animal-based
food products especially meat and meat based products since the majority of Indian adults
(81%) follow some form of dietary restriction in India. Certain religions have more restrictions
in terms of consumption of meat and meat based products. For instance, majority of the Hindus
(72%) do not consume beef since the cow is considered sacred in Hinduism, whereas Muslims

33
(77%) avoid pork meat in their diet (Corichi, 2021). One more reason to avoid meat ingredients
is the lack of cold storage infrastructure in India as mentioned before.

4.1.3 BENEFITS SOUGHT

There are several benefits of adopting a meal-kit based subscription. They save a lot of precious
time and can form a part of a person’s daily routine. Cities like Mumbai are the busiest places
in India and can be a good starting point.

Being sustainable, HelloFresh can save a lot of food waste and with prepared meals people will
be able to make decisions quicker. A grocery store is a huge place where you can get almost
anything you’d like. HelloFresh is the best alternative for the people who struggle with decision
making (Burke, 2021).

Meal-kits come with instructions on cooking the meal, hence there is a very slim chance of
ingredients going to waste.

Meal-kits are more healthier as compared to takeaways and home delivery from food joints
since the ingredients are fresh and there are very less processed ingredients used. Also the
meals are nutritionally balanced.

It also serves a learning purpose in the sense that new recipes are introduced to the consumer
who may have not tried them earlier.

4.1.4 USAGE RATE:

From the various local meal-kit businesses in the major metro cities of India, we can see that
most of the consumers are ordering them because they do not wish to have the same meals time
and again. The fixed portion sizes and the ease of making the meals makes it a convenient
choice for most millennials in the city. Chef’s Basket, a meal-kit business brand in India, sells
around 1 lakh units per month. Other local meal kit providers like Eten sell around 30-50 boxes
per day (Kagti, 2021).

HelloFresh has a brilliant opportunity to leverage this market as the business plan matches the
usage in the market.

34
4.1.5 GEOGRAPHIC LOCATION:

HelloFresh will have to concentrate this business plan on the big cities in India. The target
audience is comprising of working-class people and people who earn a high income and are
mostly based in the cities. HelloFresh will also face more competitiveness in terms of doing
business in these cities.

35
4.2 PRODUCT CHARACTERISTICS:

Fig 16: A sample picture of the HelloFresh meal kit

4.2.1 BRAND NAME AND PRODUCT

The intention of this business plan is to do a geographical diversification by launching the

business of HelloFresh in India, hence expanding its existing distribution network. HelloFresh
is among the top brands for curating meal-kits around the world among others, and one of the
first sustainable brands among other meal-kits. Creating a disruption would be beneficial for
HelloFresh in terms of unit economics (HelloFresh, 2021). This meant that each meal-kit was
designed and manufactured separately, as ingredients are procured from suppliers directly
instead of going through intermediaries like warehouses and other middlemen. It’s an
ambitious journey in itself as it has pushed people to start cooking meals by themselves, more
than they did a decade ago.

In India, there are many grocery stores to serve the general public, but there is no nationwide
meal-kit brand which is as popular as online food delivery apps like Zomato and Swiggy. It

36
can innovate the recipes as per the geography of the region for eg: Dosas in south India, Chole
Bhature in north India, etc. In this way, HelloFresh has the potential to become a household
name in major metro cities across India.

Some DIY gravies that HelloFresh should try launching during the initial implementation of
the business plan are Paneer Makhni, Vegetable Jalfrezi, Palak Paneer, etc. which are ideal to
be consumed with roti or naan and a variety of rice like Pulao, Biryani, etc.

4.2.2 FEATURES AND BENEFITS

As it’s a subscription based service, meal-kits come with pre-measured ingredients with recipe
notes so that people are able to cook the dish as per the method recommended by the chefs.
Customization as per dietary preference and desired number of meals is also available which
makes it a very flexible option (HelloFresh, n.d.).

As a meal-kit subscription service, HelloFresh has a wide variety of options to choose from. It
offers almost 50+ menu and market items each week. It delivers the recipe with the ingredients
all packed in a box on the date the customer wishes it to be delivered.

One of the significant advantages of a meal-kit subscription service is that it saves time spent
on grocery shopping. They are also affordable, convenient and offer one an opportunity to
prepare delicious, restaurant worthy meals in the comfort of your home.

HelloFresh is also follows a sustainable business model which aims to minimize food waste.

It’s a challenge to identify what the customer wants when food and tech meet each other, these
two elements are the foundation of meal-kit businesses. Consumers are more likely to frequent
meal kits if they meet their dietary goals (Stampe, 2020).

Customers desire meal-kits to be more simple to prepare. This can help revive the customer’s
sense of discovery. Inspite of not preparing and going through the process of preparing a full
meal, customers can still find inspiration in short preparation and ready to eat options. An
opportunity to discover a mix and match of ingredients is possible. The business should try to
place their brand/ingredient besides another trending ingredient. This will help build the brand
value of HelloFresh (Stampe, 2020)

37
Meal-kits come in handy when it comes to meal planning and meal prepping. Meal planning is
often time consuming and requires macro level thinking on what to cook throughout the week.
Meal prepping means gathering the tools and ingredients ahead of time to prepare the meal.
Both these activities are taken into account with meal kits from HelloFresh. Once the customer
has chosen the meal plan and weekly recipes, the customer chooses a delivery date that works
the best for them, each week on that particular day the HelloFresh box will get delivered to the
doorstep of the customer.

HelloFresh should also use the ideas of gift card and festive season boxes for festivals like
Diwali, Holi, Ganesh Chaturthi, etc.

4.2.3 POINTS OF DIFFERENTIATION

1. Sustainable

Globally, as per the Life Cycle Assessment (LCA), meals from HelloFresh have lower
carbon emissions (about 25%) in comparison to the meals cooked with ingredients
from the super-markets, as per HelloFresh’s newly published sustainability report
(2021), one of the most significant contributors to this effort is the supply chain
structure of the group. Lean on-demand supply chain is the reason for this effect
(HELLOFRESH, 2022). HelloFresh has a significantly shorter supply chain which
eliminates the need for too many middlemen and logistics.

HelloFresh’s subscription based model also reduces food waste by forecasting the
weekly demand of customers hence resulting in lower volumes of unsold inventory
and food waste.

2. Health and Nutrition

Meal-kits are more healthier as compared to meals ordered from platform based
aggregators like Zomato and Swiggy. In a survey of 700 adults by Building H, about
80% of the respondents said that meal-kits were as healthy or more healthier as

38
 compared to home cooked meals and around 69% of the users agreed that meal-kits
were healthier than meals ordered via takeout or delivery (Downs, 2022).

Fig 17: Impact of daily diet on the health of people (Building H, 2022).

3. Large Portion sizes

Portion sizes in case of HelloFresh meal-kits are larger as compared to other meal-kit
delivery services. Its an ideal choice for a family with children. With a wide variety of
menu options to choose from every week, it also has options which appeal to young
kids.

Being packed with vegetables and having a variety of flavours from all around the
world along with being kid friendly.

Meals can be ordered with 2 to 4 servings each which indicate that the portion sizes are
filling as well as healthy (McGrane, 2022).

39
4. Cheaper than grocery stores and supermarkets

What made HelloFresh stand out in terms of pricing is, its ability to be cheaper in
comparison to grocery stores and supermarkets. This is because it eliminates the need
for middlemen and sources ingredients directly from suppliers (Pijl et al., 2020).

Minimizing the price of products would be the consequence of cutting down costs on
maintaining warehouses for storage.

5. Discounts on first three meals

In markets like the UK and USA, HelloFresh offers a 60% discount on the 1st meal and
subsequently 25% on the next two meals as a part of their subscription plan. HelloFresh
should continue this trend in India for this business plan to be successful, so that it can
provide stiff competition to aggregators like Zomato and Swiggy.

6. Packaging

All HelloFresh products are packaged in a sustainable manner by using recycled

material with the objective of reducing food waste. Its make-to-order business strategy
is based on the number of customer orders rather than estimating demand. At
HelloFresh facilities, less than about 1% of the food gets wasted. A study conducted by
Wuppertal Institute revealed that customers waste 21% less food in comparison to a
meal cooked from start to finish from ingredients purchased from a traditional
supermarket (Packaging Europe, 2021).

40
4.2.4 COMMUNICATION

We save you serious time, stress and money

The above slogan will be used as the marketing message of HelloFresh, this slogan is used by
HelloFresh in UK.

HelloFresh primarily uses influencer marketing for promoting its online presence on social
media platforms particularly Instagram. Social media influencers are used by HelloFresh to
promote their culinary creations.

1. SOCIAL MEDIA: Instagram, Facebook, YouTube, etc.: Influencers often get a

promo code from HelloFresh, along with giving people an incentive to sign up for the
service it also gives HelloFresh an opportunity to track the effectiveness of these
collaborations. Influencers often mention their personal stories or lifestyles which gives
a more personal element to the collab (Julius, 2017).
HelloFresh could use popular Indian social media culinary influencers like chefs like
Sanjeev Kapoor, Vikas Khanna, Pooja Dhingra, Manish Malhotra, Saransh Golia,
Megha Kohli, Gaggan Anand, Anahita Dhondy, Ranveer Brar etc (Fleming, 2017).
Hello Fresh is good at encouraging people to share their creations in order to get other
people involved. The art of story telling can be utilized by HelloFresh to rope in Indian
influencers and use their life stories as passion for meal-kit recipes recreating a
restaurant like experience at home, the strength of community keeps people coming
back for more (Mathieu-Phillips, 2021).

2. Advertisement: Google ads are an effective tool for tapping into the marketing
potential of HelloFresh right from the start of their business. Keyword research needs
to be done properly so that traffic is not lost from relevant keywords. The following
keywords need to be covered in the following sub-categories:
• Generic terms like “meal kits”, “meal box”, “recipe kit”, “meal kits in X city”,
etc.
• Terms and search phrases related to Hello-Fresh like “gluten free meal kits”,
“vegan meal kits”, etc.

41
 • High intent Branded search terms for competitors like “ buy Blue Apron” and
“Marley Spoon reviews” should be targeted.
• For the purpose of retargeting Google display ads should be used.

3. Pinterest and Snapchat: Pinterest can be a good choice for meal-kits like HelloFresh
because majority of the user traffic there are women in late 20s to mid/late [Link] the
basis of geography and audience demographics good results can be expected out of
marketing on Snapchat (T, 2021). Since TikTok is banned in India, it shouldn’t be
considered at all (Chakravarti, 2021).

4. Email Marketing: Since advertisement costs have gone up across all platforms, email
marketing would be an ideal marketing channel for HelloFresh in India (T, 2021)

42
5.0 FINANCIAL CONSIDERATIONS:
The financial forecasting for this business plan will be carried out for the next 3 years i.e.
Year1, Year 2 and Year 3 after the launch of meal-kit delivery service in the major metro cities
of the Indian market. The launch year of the service is Year 0 and will be predominantly
focused on building a sustainable and effective supply chain. Employee induction, training,
setting up of suppliers and much more. The journey of the meal-kits from point of inception to
the point of consumption in the market will be done in Year 0.

5.1 PRICE STRATEGY AND COMPETITIVE POSITION

[Link] PROFIT MAXIMIZATION STRATEGY

In comparison to the online food delivery aggregators like Zomato and Swiggy, HelloFresh
will charge a premium for supplying pre-portioned meat-free meal-kits to its subscribers based
on a monthly subscription. In comparison to food aggregators who charge a commission and
act as a middleman between the food outlet and the customer, HelloFresh will directly source
the ingredients from the suppliers, it will save costs on logistics and middlemen. However,
HelloFresh will incur additional costs on sourcing and packing ingredients separately. As we
aim to offer a personalised and sustainable meal-kit delivery service which is eco-friendly and
packaged with high quality ingredients, it will be a first of its kind offering by HelloFresh to
its customers in India. HelloFresh operates on a Just-In-Time delivery model with an aim to
minimize perishable inventory and place importance on straight to line production and
assembly rather than on warehousing operations.

HelloFresh incurred MEUR 88 on technology in the year 2021 but has not incurred any costs
on R&D (HelloFresh, 2022) as most of the business is data driven. For setting operations in
India, HelloFresh will transfer direct costs and recurring expenses related to delivery onto its
customers.

HelloFresh will be marketed as an exclusive and sustainable recipe service with curated meal
plans. The pricing strategy will be high when there is market penetration in metro cities like
Mumbai, Pune, Kolkata, etc. There will be a focus on portraying the value of the product to
justify the high price of the recipes and how it will be worth the investment in terms of health

43
and nutrition. The expectation is to improve the profit margins of HelloFresh as well as improve
its brand image.

PRICING CHART OF HELLOFRESH (BASED ON AVERAGE PRICING TAKING THE

ANNUAL REPORT AS A BASE FOR ITS INTERNATIONAL SEGMENT IN 2021)

PARTICULARS AMOUNT PER BOX (INR)

PRICE PER BOX (A) 2360

COSTS INVOLVED PER BOX
PROCUREMENT 928
FULFILMENT 847
MARKETING 305
ADMINISTRATION 197

TOTAL COST PER BOX (B) 2277

CONTRIBUTION PER BOX (A-B) 83

*The prices listed above are based on the current markets and may change due to economic or social
factors.

*The above Pricing Chart is prepared on the basis of the average exchange rate for 2021 for EUR to
INR.

*This pricing chart is based on the estimate of the average HelloFresh meal box in the international
segment due to lack of availalbility of data on each geographical market.

5.1.2 COMPARATIVE PRICING STRATEGY.

As discussed before in section 3.1.3, HelloFresh’s two main competitors are food aggregators
Zomato and Swiggy. Most of the food delivery market in the big cities is dominated by Zomato.

Due to higher costs from commissions and promotions, restaurants have started charing more
prices from customers. Zomato and Swiggy are charging about 60% premium as compared to
dine in or takeaway from restaurants. A focus on profitability has pushed food-tech companies
to raise charges leading to differential pricing in restaurants. In survey consisting of 80
restaurants in the top 8 cities, the online and offline prices were compared. This includes a mix

44
of quick service restaurants, full service, cafes, ice cream parlours, etc. It was found in about
80% of the restaurants the online menu pricing was higher as compared to the print menu for
dine-in. About 20% of the restaurants charge a premium more than 30% of the printed menu
price. There were also instances of premium being in excess of 40% (Tandon, 2022).

Aggregators earn from commissions, ad-sales and customer delivery charges. Costs include
discounts and other variables. Variable rates of commission are charged by aggregators to the
restaurants/food outlets. Packing charges amount to 4-5% of the total bill along with the
delivery fee charged by aggregators which shoots up the overall cost by 13%. Cost of delivery
orders on an average before discounts is 27-28% higher than the menu price.

A significant mark-up could result in customer dissatisfaction. Since the majority of the market
is dominated by Zomato and Swiggy, HelloFresh can utilise this opportunity to penetrate the
market. Having a good brand image, it can justify the high pricing and can market itself as a
health focused subscription service. Although pricing on delivery platforms are lower
compared to our business plan, not many people prefer ordering every day from restaurants/
food outlets as its not feasible and cannot fulfil their nutrition needs in the long term.

Boxes from HelloFresh have large portion sizes ranging from 2-6 recipes depending on the
subscription plan selected by the customer with deliveries every week. This will be a
competitive advantage for HelloFresh to counter the popular aggregators as restaurant portion
sizes only last for a meal and cooked meals start loosing their freshness if kept stored for long
periods of time.

Targeting a niche market segment consisting of working professionals, bachelors and people
who want to lead a healthy lifestyle, this business plan justifies the pricing for the service.

5.2 MARKET SHARE

As mentioned before, there is a monopolistic competition to capture the market share between
Zomato and Swiggy. For the past few years, the competition between both the food aggregators
has been neck to neck with fierce competition between the two to hold a significant market
share in the online food delivery segment. Zomato and Swiggy both were neck and neck
holding a 50% market share dominating the $5 billion Indian food delivery market
(Moneycontrol, 2022).

45
However, recently Zomato has surged past Swiggy, holding a market share of 55%. Although
both, Zomato and Swiggy are at par in terms of food delivery numbers, it surpassed Swiggy in
terms of quick commerce.

Since the market share is dominated by two players, it’s a good opportunity for a competitor
like HelloFresh to enter and penetrate the market, initially it can expect the market share to be
relatively low following the profit maximization strategy. Competitors to Zomato and Swiggy
like UberEats and Foodpanda have had to sell their stocks or have had to wind up due to the
market dominance by these two players. Most recently, Uber technologies sold its Uber Eats
business to Zomato, India’s largest food delivery business exiting the market.

Fig 18: Market share of online food delivery apps as of 2018 (Bhattacharya, 2022).

A conservative market share forecast of 2% can be expected at the end of Year 1 for this
business model followed by 5% at the end of Year 2, 8% at end of Year 3. A conservative
forecast in terms of market share each year is rational and achievable by HelloFresh in a start-
up ecosystem in major Indian cities.

46
5.3 SALES FORECAST

Growth in the Indian food app industry is exponential with large discounts and dominance by
large players like Zomato and Swiggy , having captured about four-fifths of the market and
claim to be in about 500 Indian cities (Parkin & Bradshaw, 2020). Fellow competitors like
Foodpanda have fallen far behind due to rising costs of competition.

Fig 19: Growth of the Indian food app industry (Parkin & Bradshaw, 2020).

Initially, during the 1st Year, HelloFresh can have customers who order from Zomato and
Swiggy. Gradually, after distributing some free sample boxes for trial to the first 100
customers. Our business should expect losses during the first 6 months at the start phase of the
plan.

This business plan will aim to achieve break-even sales in the next 6 months, enough to cover
the fixed costs of setting up the business and logistics. Given the fact that food aggregators
offer a lot of discounts to their customers, on the basis of this business plan, HelloFresh will

47
provide discounts on the first 3 boxes to each new customer on subscribing to the service. For
maximising the sales to reach break-even and to successfully implement this business plan it
is recommended that HelloFresh offers the same rates of discount as it does in other markets,
60% off on the first box and 25% off on the next two boxes.

About 16.6% of the total Indian population belongs in the age group of 25-34 years (Kemp,
2022). Post the COVID-19 pandemic, more people have started using the internet in India
owing to online classes and zoom meetings. So more people have the opportunity to join online
food delivery platforms who have a high growth rate. HelloFresh has the perfect opportunity
to jump on this bandwagon especially after COVID-19 since the internet user base has
expanded considerably.

Fig 20: Users of online food delivery services in India split into platform to consumer and restaurant to
consumer (Statista, 2022).

48
ESTIMATED SALES FORECAST OF HELLO-FRESH FOR THE NEXT
THREE YEARS (2023-2025)

FACTORS YEAR 1 YEAR 2 YEAR 3

Users using platform 113.5m 135.2m 152.9m
to consumer delivery
(million)
Estimated market 2% 5% 8%
share (%)
Estimated sale 2.27m 6.76m 12.232m
quantity (million)
Note: The estimated sales forecast for HelloFresh is calculated on the basis of the data collected from
Statista for the online food delivery market in India.

The above figures were arrived on the basis of estimated number of people ordering through
the platform to consumer delivery segment. Estimated sales quantity are arrived on the basis
of the estimated market share arrived at in the previous segment. This estimate is subject to
variation on the basis of the future economic or social conditions in the market.

49
6.0) SUMMARY
To conclude this business plan is a geographical diversification of HelloFresh in India. This
business plan aims to penetrate the online food delivery market in major Indian cities to give a
healthy meal alternative to restaurant-based meals and takeout through platform based
aggregators like Zomato and Swiggy. The business plan starts with an introduction of the
company through its history and background. An environmental analysis is done of the micro
and macro environment which includes identifying the suppliers, marketing intermediaries and
competitors for the micro-environment and PESTEL analysis for the macro environment. This
is followed by a SWOT analysis of the company and identifying the steps for the company to
establish itself as a new business in a huge market like India.

Targeting, segmentation and product characteristics state the target audience, demographics
and characteristics of the meal-kit service that Hello-Fresh will offer to this audience. Points
of differentiation states how Hello-Fresh has a competitive advantage over other aggregators
in terms of sustainability, health benefits, etc.

The communication section states the platforms through which Hello-Fresh will market its
service through social media, advertisements, emails, etc.

The financial considerations forecasts how practically viable this business plan will be for
Hello-Fresh to generate good revenue from its operations in Indian cities and forecasts the sales
and overall profitability of the plan in the next three years. Realistically the business should
aim to achieve breakeven sales in the first year followed with gradual increase in profits in the
next two years.

This business plan has the vision to promote a healthy and nutritious lifestyle among its
customers while also being a sustainable meal alternative to fast food and restaurant-based
meals.

50
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