In India, dining out is giving way to “eating in” as fast-food chains latch on to food-delivery startups.

Besides urban dining habits, food-aggregator apps are even transforming restaurant chains’ view of their own businesses.

For instance, in July this year, tea retailer Chai Point launched a new cafe in Bengaluru with a layout unlike any till now: It has an area demarcated for food-delivery apps’ personnel. The chain now plans to replicate this design, laying emphasis on delivery aggregators, at most of its new outlets. “The level of participation [orders coming through these apps] is growing at a faster rate,” said Amuleek Singh Bijral, co-founder and CEO, Chai Point.

Global food brands like McDonald’s and Kentucky Fried Chicken, too, are bolstering their tie-ups with food aggregator startups like Zomato and Swiggy, even setting up separate teams to manage these platforms.

Last month, India’s largest homegrown coffee shop chain, Café Coffee Day, launched a “virtual restaurant” at its existing outlets to cater only to orders from UberEats, the food-delivery arm of the cab-hailing app Uber.

“While the large [food/cafe] chains have their own fleet, they cannot match the reach of food aggregators and, from a customer point of view, they increasingly want more elaborate meals. So, being present on these platforms is essential,” said Shubham Anand, head of retail-consumer packaged goods at the consulting firm RedSeer.

Besides, as long as aggregators are being funded, they’ll continue to expand and only increase restaurants’ reach, said Anand.

Data: Tracxn, *until Aug. 01, 2018.

Delivery shakeup

India’s online food-delivery market is currently pegged at $7 billion (Rs 50,375 crore). Of late, the sector has attracted deep-pocketed new entrants. Google, for instance, launched its restaurant-delivery and home-services platform, Areo, in March this year.

But it’s Zomato and Swiggy that lead the pack with a combined 80% share. Revenues at Swiggy grew over six times from the previous year to touch Rs 133 crore in 2017, while Zomato posted an 80% year-on-year jump in turnover to Rs 333 crore in the same year.

Bengaluru-headquartered Swiggy hosts over 45,000 restaurants on its platform, a company executive told Quartz over email. “We will take brands such as Domino’s, McDonald’s, Pizza Hut, Burger King, and Faasos to newer locations especially in tier 2 and 3 markets,” the executive added.

But the market is still in its infancy as aggregators form a small part of the delivery business – at Chai Point, just a quarter of all online orders come from food-aggregating apps. Yet, the “uberification” of the sector is potentially transformational. “Now we even take decisions on opening new stores based on data from our aggregation partners,” says Chai Point’s Bijral.

The story isn’t different at McDonald’s, which spotted a consumer shift to online orders for its burgers and beverages in 2014. “By 2015, last-mile logistics firms came up and it fit into our thinking because we knew that technology would be a key enabler for delivery,” Akshay Jatia, general manager, brand extensions Hardcastle Restaurants, which runs over 280 McDonald’s restaurants in western and southern India, told Quartz.

Currently, 70% of McDonald’s deliveries by volume come via online ordering (this includes the McDonald’s in-house app and third-party aggregators). Jatia, however, declined to give the share of orders from food aggregators alone.

For McDonald’s, each delivery-enabled outlet is expected to contribute up to Rs 1.6 crore ($230,000) to revenues via online orders by 2022. “We anticipate that 70%-75% of all our restaurants will have delivery hubs by then,” Jatia added.

Meanwhile, American fast-food chain Kentucky Fried Chicken’s association with food aggregators has “graduated from an engagement level to being business partners,” according to Moksh Chopra, chief marketing officer of KFC India, part of American food company YUM! Brands. In fact, besides its 340 or more outlets in India, KFC is also experimenting with stealth (dark) kitchens that operate as delivery hubs “to further widen the reach and leverage the rapidly growing online food-delivery mode,” said Chopra.

Restaurant chains are also pairing up with aggregators for marketing campaigns. Recently, Subway tied up with Swiggy to deliver over a lakh sandwiches across its 400 outlets, the restaurant chain said in a November 15 statement.

Not all is milk and honey

But the sector has received its share of flak.

Recently, the Food Safety and Standards Authority of India pulled up aggregators for hosting unverified outlets on their platforms. The watchdog asked them to ensure “training and capacity building of restaurants for improving food safety and hygiene rather than focusing only on deep discounts and aggressive marketing.”

Profit-marring deep discounts and the lack of safety checks have cast a shadow on the survival chances of the aggregators in the long run. Restaurants, therefore, are cautious not to be overly reliant. “We can look at them from a two-year horizon as long as they are well-funded and then once that runs out, who knows where they will be?” said a sceptical Bijral of Chai Point.

Some like Jubilant Foodworks, which runs the Domino’s chain of pizza stores in India, has revamped their in-house ordering app. Its updated app got downloaded 1.7 million times, the company said during its second-quarter earnings for this fiscal.

Jatia of McDonald’s, too, prefers preserving the in-house delivery infrastructure even as aggregators are expanding. “Both our platform and third-party (apps) have grown complementary. We are continuously growing our own platform, it is very important to us,” he says.

This article first appeared on Quartz.