Zomato, Swiggy likely to expand logistics services, in talks with states for liquor home delivery
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- Food delivery orders for Zomato and Swiggy have dipped 70% in the last 10 days of April to below 1 million
- In January this year, Zomato had secured USD 150 million in fresh funding from Ant Financial, a subsidiary of China-based giant Alibaba
- Zomato and Swiggy are in talks with several state governments to seek permission for home delivery of alcohol from authorised local retail outlets
New Delhi: Food aggregator apps like Swiggy and Zomato are actively contemplating expanding their logistics services to businesses outside their platforms in an attempt to mitigate the impact of weeks-long lockdown to curb the Covid-19 pandemic.
As the coronavirus crisis has made business tougher, Zomato, the Gurgaon-based restaurant discovery platform, is planning to launch a consumer-facing pick-up and drop service, emulating rival Swiggy’s Genie service.
It is worth noting that with less demand, food delivery orders for Zomato and Swiggy have reportedly declined 70 per cent in the last 10 days of April to under 1 million a day because as customers step back and top restaurants close shop amid the coronavirus-induced lockdown. The recovery may take even longer time in tier 2 and tier 3 cities.
More importantly, both startups are in talks with several state governments to seek permission for home delivery of alcohol from authorised local retail outlets. The development comes at a time when both companies have made a giant leap forward towards delivering grocery and other items for daily use during the current lockdown period.
As part of its B2B push, restaurant aggregator and food delivery company Zomato has started signing up merchants for pre-paid and cashless last-mile logistics services, as per ET report. Worth mentioning here is that in January this year, Zomato had secured USD 150 million in fresh funding from Ant Financial, a subsidiary of China-based behemoth Alibaba.
The financial daily quoted investors as saying that both Zomato and Swiggy’s move to diversify beyond food delivery will offset the losses from the core business, with hyperlocal deliveries helping figures jump sharply to make their businesses sustainable. In the last two months, the idea to diversify beyond food delivery has been far more evident in Zomato’s strategy as the company is trying hard to strengthen its foothold in the market.
For Swiggy, the significant scale-up of grocery and essentials services has happened over the last fifty days.
Vivek Sunder, chief operating officer of Swiggy at the Economic Times Virtual Tech Summit on Tuesday, said: “We are operating at a fraction of what we were pre-Covid-19…we are still shut in 200 cities out of 500-plus cities…but it is important to focus on what we can do and cope with the situation. As cities open up and governments allow, more stores will come up.”
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