What Zomato’s 10-Minute Food Delivery Model Means for the Quick Trade Industry

PUT THE ‘QUICK’ in fast food, it’s the flavor of the season. Recently, food aggregation giant Zomato launched a 10-minute food delivery service. For now, he’s confined to Gurugram, Zomato’s affluent base, but he plans to expand to other cities soon.

“No one in the world has delivered hot and fresh food in less than 10 minutes at scale so far and we were excited to be the first to create this category, globally,” said Deepinder Goyal , co-founder and CEO of Zomato.

The move to inject the white-hot business model of fast commerce into food delivery seems to have shaken India’s burgeoning e-commerce space. Delivering groceries and essentials in around 10 minutes is already a thing, spearheaded by startups like Zepto and Blinkit (formerly Grofers) and also the likes of Reliance’s JioMart and Tata-owned bigbasket. Meanwhile, Zomato rival Swiggy, which already has a burgeoning instant grocery delivery model, also plans to expand it to food. And, Bhavish Aggarwal also turned his attention to model with Ola Dash.

But as one analyst jokes: are we counting our biryani chickens before the eggs even hatch?

“Is there a demand for food delivered in 10 minutes? I don’t think thousands of people have written to say that if you don’t deliver in 10 minutes we’ll stop ordering,” said Rashmi Daga, founder of cloud-based cooking channel FreshMenu. “Consumers need to be informed of the costs associated with demanding speed. We are only creating undue pressure on everyone around us.

When Goyal announced Zomato’s 10-minute delivery model on a blog in March, he was criticized for putting delivery agents under undue stress and causing traffic problems.

“I will seriously question the quality of this food which can be cooked, packaged and delivered in 10 minutes, anyone else would too,” said restaurateur Rachel Goenka, head of the Mumbai chapter of the National Restaurant Association of India. .

Goyal was obviously prepared for such reactions and clarified: “We don’t put pressure on delivery partners to deliver food faster, nor do we penalize [them] for late deliveries. Time optimization does not happen on the road and is not life threatening. The average delivery time of 30 minutes [presently] is too slow and will soon become obsolete. If we don’t make it obsolete, someone else will.

There is a clue there. The pandemic has provided an opportunity for growth like never before. But despite skyrocketing orders and commission rates ranging between 18% and 30%, food aggregators soon realized that after steep discounts, delivery costs and low average order value (less than 500 rupees), there was not much money to be made.

Enter fast trading, as an added value to additional activities. It’s no coincidence that Zomato’s recent acquisition of Blinkit, a fast grocery delivery platform, preceded the announcement of 10-minute food delivery. Additionally, he had noticed that Swiggy was outpacing its revenue in recent years after going beyond food delivery with InstaMart (essentials delivery) and Genie (courier).

“There is massive rapid commerce growth due to online penetration and multiple growth seen in Tier 2 and Tier 3 cities,” said Harsha Razdan, National Leader (Consumer Markets, Life Sciences). Internet Life and Business), KPMG in India. “Given the low margins on deliveries, it is important for fast trade businesses to understand the complexity of operations and work on key levers driving efficiency so they can maximize benefits and deliver quality deliveries on time. appropriate.”

Contrary to popular belief that a 10-minute delivery model involves food being reheated or cooked quickly and sent with rushed delivery people, the way it works is quite different. This involves targeting what companies call “high demand neighborhoods,” essentially residences or affluent customers who order frequently based on their history, and setting up finishing stations in partnership with restaurants. Only selected dishes are offered in the 10-minute window, depending on popularity and possibilities for standardization – a sandwich is easy to standardize, a lamb stew not easily.

Technology comes into play in a major way here, ranging from robotic machines like the one at Bengaluru’s Mukunda Foods that can speed up anything from dosa to momos, to datasets ranging from predictive analytics to logistics planning used to maximize efficiency and reduce time required. “[Having] arrival stations 1-2 km from [the customer means] delivery partners need to travel only 3-6 minutes at a rated bicycle speed of 15-20 km. Our delivery partners actually have to travel shorter, defined routes for this,” said Rinshul Chandra, vice president of Zomato who leads the 10-minute food delivery project.

Zomato obviously hopes that the 10-minute model will be a dual-motor booster. Ideally, this experience will give it a more efficient model of finishing stores and shorter delivery cycles, which will lead to more orders and therefore more revenue. Plus, with Blinkit, he can find synergies between food delivery and grocery delivery, a bus he’s missed so far where others make hay.

Like Zepto, founded by two Mumbai teenagers just after the pandemic and shook up the market with its 10-minute delivery proposition. “At a time when other grocers delivered in four or five days, we experienced fast deliveries: 45 minutes, 30 minutes, then 10 minutes. The reaction we got from customers, retention rates and other scores just increased after 15 minutes,” said Founder and CEO Aadit Palicha. “People are excited about the 10 minute bit, but what really drives repeat use is a high degree of accessibility and convenience. Ten minutes is kind of a representation of that – the reliability of it all .

The biggest goal of this model, however, would be to be a “one-stop-shop” for everything essential. The recent unveiling of great apps like Tata Neu and JioMart testify to this.

Yet for a country where the quickest food option for a long time was to get a “30 minute or free” pizza, the new offer has a chance to upend many habits. A recent RedSeer report said India is ahead of other leading markets (including China) in rapid trade adoption, and it could be a hot market. worth more than Rs4 lakh crore in three years.

Fast or slow, the proof of the pudding is finally in the eating.