Zomato to test food delivery within 10 minutes in Gurugram next month

To pilot service in Gurugram next month

Food delivery major Zomato said on Monday that it will be piloting a service to deliver food in 10 minutes from next month, claiming that the cost to end customers may reduce by 50 per cent if the plan works as envisioned.

The company said that ‘Zomato Instant’ will be kickstarted with four hyperlocal delivery stations in Gruguram – with each station stocking 20-30 dishes from different restaurants based on demand in the specific locality.

“To fulfil our quick delivery promise, we do not put any pressure on delivery partners to deliver food faster. Nor do we penalise delivery partners for late deliveries. The delivery partners are not informed of the promised time of delivery. Time optimisation does not happen on the road, and does not put any lives at risk,” said Deepinder Goyal, co-founder and CEO of Zomato.

The company said that its quick delivery promise relies on a dense finishing stations’ network, which would be located in close proximity to high-demand customer neighbourhoods. Additionally, sophisticated dish-level demand prediction algorithms, and future-ready in-station robotics will be employed to ensure that the food is sterile, fresh and hot at the time it is picked by the delivery executive.

“Due to demand predictability at a hyperlocal level, we expect that the price for the customer will get significantly reduced, while the absolute rupee margin/income for our restaurant partners as well as our delivery partners, will remain the same,” Goyal said.

This development comes a week after reports surfaced that the food delivery major is planning to acquire quick commerce start-up Blinkit (formerly Grofers), following a loan of $150 million in the company. The loan has been extended within a year of the listed food delivery start-up’s $100 million equity infusion in Grofers.

Goyal did not shy away from the fact that the 10-minute food delivery service is related to the company’s interest in Blinkit. “After becoming a frequent customer of Blinkit, I started feeling that the 30-minute average delivery time by Zomato is too slow, and will soon have to become obsolete. If we don’t make it obsolete, someone else will,” he said.

“Innovating and leading from the front is the only way to survive (and therefore thrive) in the tech industry,” he added.

Meanwhile, media reports have suggested that Blinkit is going through a severe cash crunch, bringing the unsustainability of the quick commerce model into focus even as competition is increasing in this space with several deep-pocketed players like SoftBank-backed Swiggy, Reliance-backed Dunzo and Tata-owned BigBasket, among others, joining the race for speedy deliveries.

Zomato’s stock closed at Rs 80.35 on the BSE on Monday – down 48 per cent from its lifetime high of Rs 154.7 – at a time when tech stocks have been hammered around the world.