zomato delivery: Zomato 10-minute delivery plan feels the heat

New Delhi | Mumbai: Online food-delivery and restaurant booking company Zomato’s 10-minute delivery plan is being re-evaluated as the platform hasn’t been able to meet the time target for all orders during its pilot in Gurgaon, multiple industry executives said.

“Shortage of delivery fleet and intense heat wave in the North, which has also led to limited delivery workforce, are causing delivery delays of 15-20 minutes, unlike the 10-minute commitment offered by Zomato Instant,” said one of the persons cited above. “Besides, Instant does not have a separate delivery team yet.”

On the app, Zomato Instant shows delivery time of 15-20 minutes on average. The company said the plan, which was initiated in April, is running as expected.

“The 10-minute delivery pilot in limited locations of Gurgaon is on track. The pilot was intended to identify a consumer demand for quick-commerce, and we’ve been successful at that,” a Zomato spokesperson said. “The future course for the pilot is to deepen our penetration in Gurgaon before we scale this up to other cities and finetune a model that would work best for our restaurant and delivery partners.”

According to a person in discussions with the company, Zomato Instant was close to launching services in Bengaluru this month, but the plan was put on hold. The person was told by a senior executive at the company that the Instant trial had been added to the ongoing inquiry by the Competition Commission of India (CCI) into Zomato and its peers. That’s part of the antitrust watchdog’s investigation of online food-delivery players over platform neutrality and data masking.

Bengaluru rollout on hold

“They were about to start Zomato Instant in Bengaluru but the CCI came into the picture and, other than Gurgaon, they had to suspend the plans to expand it in other cities ,” said the person cited above.

The Gurgaon pilot is a limited one, with brands such as Chaayos, Dana Choga and Caterspoint signing on for 10-minute delivery. Zomato said the fast service involves mini ‘kitchen stations’ within neighbourhood clusters.

Zomato Instant’s launch and focus on 10-minute delivery was to get the ball rolling on ultra-fast food delivery, said the people cited above. However, the company may settle for a longer time frame eventually, these people said.

The Instant plan was opposed by several restaurant chains.

“It has to be closer to 10-20 minutes of preparation and delivery each… that is minimum. It is just impossible to do the whole process in 10 minutes. It will settle down to a number that is sustainable in terms of cooking, payout to the delivery boys, and probably charging a premium for ultra-fast delivery,” said an executive.

The chief executive of a large quick service restaurant chain said, “Unlike grocery, which is pre-packaged, the dynamics of fresh food delivery are very different. Replicating quick commerce in fresh food needs to be accepted by both restaurants and consumers.”

Another food industry executive said the company is bullish on the ultra-fast offering and will steadily expand it.

Zomato Instant has been facing challenges such as riders migrating to quick commerce grocery delivery startups and a shortage of delivery staff. ET reported on May 11 that Zomato, Swiggy and Zepto, among others, were seeing delivery timelines being stretched as workers battle rising fuel prices and return to pre-pandemic jobs apart from demand pressure due to multiple ultra-fast delivery startups.

After the pushback against Zomato Instant, restaurant partners have also become wary of delivering food within 10 minutes. “Customers will lose the confidence when they get the food in 10 minutes. They have doubts on the freshness of the product,” said a person who was approached to participate in the pilot.

Zomato charges an 18-25% commission per order for deliveries depending on its arrangement with restaurant partners on its marketplace. ET reported on April 22 that the company is exploring various commercial arrangements for Zomato Instant, including buying a pre-decided quantity in bulk from restaurant partners and selling it to consumers at a markup. Doing so will help the aggregator capture a larger chunk of the commission, a source added.

Stay on top of technology and startup news that matters. Subscribe to our daily newsletter for the latest and must-read tech news, delivered straight to your inbox.