Zomato sees an opportunity in catering business to Expand into Large-Order Services

Zomato sees an opportunity in catering business to Expand into Large-Order Services

Zomato is expanding its reach beyond food delivery by eyeing a slice of the catering business and exploring new non-food offerings for its loyalty program, Zomato Gold. The company's Chief Executive for Food Delivery, Rakesh Ranjan, revealed these plans, emphasizing the need to create additional "occasions" for customers to order and grow the platform's addressable market.

Catering to Large Orders:

  • Zomato plans to leverage its network of restaurants to cater to large orders, catering to events like gatherings, parties, and picnics.

  • This move capitalizes on the growing demand for convenient catering solutions, particularly for smaller gatherings where traditional food delivery falls short.

Spicing Up Zomato Gold:

🎯 Zomato Gold, with its 40% contribution to the company's gross order value, is a crucial driver of growth.

The company plans to further enhance the program by:

🎯 Adding non-food offerings like exclusive partnerships with brands like Adidas.

🎯 Investing in technology and experience improvements to make Gold membership more valuable.

🎯 Expanding Gold benefits, potentially beyond food delivery to encompass services like quick commerce.

Addressing Margin Concerns:

🎯 While Zomato acknowledges the impact of Gold on food delivery margins, they prioritize the program's growth potential.

🎯 The company believes Gold's contribution to order volume and GOV outweighs the short-term margin impact.

Scaling Back Underperforming Initiatives:

🎯 Zomato discontinues its intercity delivery service, "Zomato Legends," from specific cities due to its limited scalability.

🎯 The company is reimagining the service as a 60-minute delivery option for pre-stocked food items, catering to immediate hunger needs.

🎯 Zomato's strategic focus lies in building "occasions" for increased customer order frequency.

🎯This involves operational changes, marketing campaigns, and introducing new features and offerings like catering and non-food Gold benefits.

🎯 The company aims to leverage its existing network and customer base to unlock new growth opportunities beyond traditional food delivery.

In conclusion, Zomato's strategic shift towards catering and non-food offerings within Gold reflects its ambition to become a more comprehensive food and convenience platform. The company's focus on "building occasions" and catering to diverse customer needs positions it well for continued growth in the evolving food delivery landscape.

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December 12, 2023

Kalpana Maurya