ETtechMumbai: Zomato has rolled out its 10-minute food delivery service - Zomato Instant - in Gurugram from Friday, a person familiar with the matter told ET. The food delivery app later confirmed that the service was now live in the city.
“We are scaling up as we speak and looking to expand into most of Gurugram over the next month,” a company spokesperson said.
The pilot is live in partnership with brands including Biryani Blues, Dana Choga, and Chaayos.
According to multiple sources, the company is exploring models in which it buys a pre-decided quantity in bulk from restaurant partners and sells it to consumers at a markup.
Doing this is expected to help Zomato capture a larger chunk of the commission, another source said. Typically for it’s food delivery service, Zomato charges an 18-25% commission per order for deliveries, depending on its arrangement with restaurant partners.
The food delivery company is also in talks with multiple restaurants to have its own personnel execute last-mile assembly and heating of food before dispatching the order, according to four sources.
A Zomato spokesperson denied that it would play a part in food assembly and declined to share the commercial details of its partnerships and its commission on the orders. It said preparation and assembly would be the restaurant partners' responsibility.
“Restaurants will pay rent to use the infrastructure. This, for some, could be through additions to the existing commissions or a separate payout, depending on the restaurant partner and what works for whom. Some would also be getting their ingredients from Hyperpure, so it's basically a bundled service from our end which includes logistics, supply of ingredients and infrastructure,” the spokesperson said.
An industry source said Zomato is betting on high frequency and new consumer behaviour to deepen the food delivery market amid stagnating quarterly growth.
Its gross order value (GOV) grew 84.5% year on year (YoY) and 1.7% quarter on quarter (QoQ) to Rs 5,500 crore in the December quarter. This was despite the company expanding its services to 180 new cities, taking its total presence to over 700 cities.
“Zomato may stand to make up to 40% per order since it owns the entire supply chain in the Zomato Instant model,” the person cited earlier said.
Ultra-fast delivery & gig workers
The 10-minute food-delivery service had led to a huge debate on social media after Zomato’s chief executive Deepinder Goyal made it official on March 21.
Goyal defended the move, saying it was safe for delivery staff.
“Ten-minute delivery is as safe for our delivery partners as 30-minute delivery,” Goyal claimed.
He added that Zomato would not penalise delivery workers for late deliveries and offer no incentives for on-time deliveries either. In fact, delivery partners are not informed about the promised delivery time, Goyal said.
ET also reported that other players such as Ola and Swiggy were also exploring ultra-fast food delivery services.
Zomato will facilitate 10-minute deliveries through “a dense finishing stations network” located near high-demand customer neighbourhoods, Goyal wrote in a blog post on March 21.
“Sophisticated dish-level demand prediction algorithms and future-ready in-station robotics are employed to ensure that your food is sterile, fresh, and hot at the time it is picked by the delivery partner,” he said.
The proposed pilot also caused concern among lawmakers on road safety and possible traffic violations in southern states including Tamil Nadu and Karnataka, ET reported on March 28.
“We are scaling up as we speak and looking to expand into most of Gurugram over the next month,” a company spokesperson said.
ET was the first to report on March 18 that Zomato was in talks with restaurant partners and cloud kitchens to pilot the 10-minute delivery service in the city.
The pilot is live in partnership with brands including Biryani Blues, Dana Choga, and Chaayos.
According to multiple sources, the company is exploring models in which it buys a pre-decided quantity in bulk from restaurant partners and sells it to consumers at a markup.
Doing this is expected to help Zomato capture a larger chunk of the commission, another source said. Typically for it’s food delivery service, Zomato charges an 18-25% commission per order for deliveries, depending on its arrangement with restaurant partners.
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The food delivery company is also in talks with multiple restaurants to have its own personnel execute last-mile assembly and heating of food before dispatching the order, according to four sources.
A Zomato spokesperson denied that it would play a part in food assembly and declined to share the commercial details of its partnerships and its commission on the orders. It said preparation and assembly would be the restaurant partners' responsibility.
“Restaurants will pay rent to use the infrastructure. This, for some, could be through additions to the existing commissions or a separate payout, depending on the restaurant partner and what works for whom. Some would also be getting their ingredients from Hyperpure, so it's basically a bundled service from our end which includes logistics, supply of ingredients and infrastructure,” the spokesperson said.
An industry source said Zomato is betting on high frequency and new consumer behaviour to deepen the food delivery market amid stagnating quarterly growth.
Its gross order value (GOV) grew 84.5% year on year (YoY) and 1.7% quarter on quarter (QoQ) to Rs 5,500 crore in the December quarter. This was despite the company expanding its services to 180 new cities, taking its total presence to over 700 cities.
“Zomato may stand to make up to 40% per order since it owns the entire supply chain in the Zomato Instant model,” the person cited earlier said.
Ultra-fast delivery & gig workers
The 10-minute food-delivery service had led to a huge debate on social media after Zomato’s chief executive Deepinder Goyal made it official on March 21.
Goyal defended the move, saying it was safe for delivery staff.
“Ten-minute delivery is as safe for our delivery partners as 30-minute delivery,” Goyal claimed.
He added that Zomato would not penalise delivery workers for late deliveries and offer no incentives for on-time deliveries either. In fact, delivery partners are not informed about the promised delivery time, Goyal said.
ET also reported that other players such as Ola and Swiggy were also exploring ultra-fast food delivery services.
Zomato will facilitate 10-minute deliveries through “a dense finishing stations network” located near high-demand customer neighbourhoods, Goyal wrote in a blog post on March 21.
“Sophisticated dish-level demand prediction algorithms and future-ready in-station robotics are employed to ensure that your food is sterile, fresh, and hot at the time it is picked by the delivery partner,” he said.
The proposed pilot also caused concern among lawmakers on road safety and possible traffic violations in southern states including Tamil Nadu and Karnataka, ET reported on March 28.
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