For those living in India’s small towns, for instance, Junagadh in Gujarat, Rishikesh in Uttarakhand or Jalna in Maharastra and yearning for their favourite food home delivered would now have Zomato fulfilling it. Swiggy-rival and Alibaba-backed online food discovery and ordering startup Zomato has now expanded its food delivery service to more than 300 cities in India, up from over 200 at the beginning of April this year. On the other hand, Swiggy delivers to 197 cities in India, as per its website.
Over 100 new cities added by Zomato in last two months includes Chikmagalur and Hosur in Karnataka, Hazaribagh and Ramgarh in Jharkhand, Jalna and Parbhani in Maharashtra, Ayodhya and Raebareli in Uttar Pradesh, Bhuj and Junagadh in Gujarat, Nagercoil in Tamil Nadu, Shimla and Mussoorie in Himachal Pradesh, Rishikesh in Uttarakhand, Kharagpur in West Bengal, Chhapra and Begusarai in Bihar etc., the company’s CEO for food delivery Mohit Gupta said in a blog post on Monday.
The expansion has also brought three more cities of India’s Northeast — Tripura’s Agartala and Silchar and Dibrugarh in Assam into the delivery fold. The highest number of launches has been in Punjab and Andhra Pradesh, Gupta said, however, the number of cities wasn’t mentioned.
Zomato is partnering with “45-50 restaurants in each city on average,” said Gupta. This number will “move northward over the coming weeks.”
While the population and the number of restaurants are among the key metrics for a city to qualify for Zomato services, interestingly the number of students a city, irrespective of the size, is another important area to look at before launch.
“10 years from now, we think that these students are going to be our biggest and most influential brand ambassadors, and we want to grow up with them,” said Gupta.
Zomato’s total cost increased from $80 million (Rs 560 crore) in FY18 to $500 million (Rs 3,500) in FY19, the company said in its annual report. Its losses for FY19 stood at $294 million (Rs 2,058), most of which came from its food delivery business in India. Moreover, its revenue grew over 3X growth from $68 million in FY18 to $206 million in FY19 — ahead of $180 million it had targeted.
“This is due to the investment they have put to compete on the delivery side with Swiggy. They figured out that more people are eating at home and Swiggy is eating into their market share. However, with Zomato you can also dine in apart from home delivery whereas Swiggy only does home delivery. So Zomato has to invest more to give a complete experience to customers,” Harish HV, an independent analyst for internet businesses and former Partner, India Leadership team at Grant Thornton had told Financial Express Online.
India’s online food delivery market is expected to grow from $7.1 billion in 2019 to $10.3 billion by 2023, as per statistics portal Statista.