How Zomato, Swiggy and Zepto achieve disruptive food deliveries in 10 minutes

At least five companies, including Zomato Ltd. and recently listed rival Swiggy Ltd. have unveiled or announced plans to offer fast food delivery in recent weeks.

But how they do it varies: Zomato’s food delivery app, Blinkit, Bistro and Zepto Cafe, rely on in-house kitchens to quickly cook and assemble dishes, while Swiggy partners at Starbucks Corp. restaurants. to McDonald’s Corp.

While home delivery has existed in India for decades, with mom-and-pop stores employing runners, recent years have seen a radical transformation. The technology has helped give rise to startups offering ultra-fast deliveries and these have been appreciated by an affluent, smartphone-savvy urban population hungry for instant gratification.

The result has been apps like Zepto and Blinkit, which deliver eggs to headphones — even iPhones — at a breakneck pace, while similar services typically take a few hours elsewhere in the world.

“Impulsive buyers”

“Rapid commerce has changed consumers, who have become more impulsive buyers,” said Karan Taurani, senior vice president at Elara Securities India Pvt. These platforms have now deployed rapid food deliveries to satisfy these impulses and “enhance the user experience”.

The meteoric success of Swiggy and Zomato has not only shaken up the Indian retail sector, it has also catapulted them to the status of stock market darlings. Shares of Swiggy have surged 53% since listing last month, while those of Zomato have surged 133% this year.

As India’s 10-minute craze enters the food delivery segment, brokers see a new avenue for growth while some consumers worry about the quality of food cooked with such momentum.

India’s online food delivery market is expected to more than double to $15 billion by March 2029, according to a Dec. 18 report from JM Financial. Platforms accounted for only about 11% of the country’s total food consumption in 2023, compared to 40% in China and 58% in the United States, according to the report.

“Bistro’s 10-minute delivery proposition is expected to help the company better penetrate breakfast meal and evening snack consumption” in major Indian cities, JM Financial Ltd analysts wrote. led by Swapnil Potdukhe about Zomato in the report.

Zepto Cafe, which was the first to launch 10-minute food deliveries in 2022, is adding 100 cafes per month and recording 30,000 orders per day, its founder Aadit Palicha wrote on X in a Dec. 11 post.

It will now face competition from Zomato’s Bistro, Swiggy’s Bolt, Dash by Ola Consumer and Magicpin’s MagicNOW. BigBasket, owned by the Tata group, said this week that it was finalizing the service.

These fashionable services are already finding takers. Bolt accounts for 5% of Swiggy’s total food delivery orders in the two months since its launch, Sidharth Bhakoo, chief business officer of Swiggy’s food marketplace, said in an email. “We expect this to hit 10% of all food delivery orders at some point in the near term. »

These quick meals come against a backdrop of health concerns and growing obesity in India. The country is one of the largest consumers of junk food, driven by the growing availability of packaged foods and lax food safety regulations.

“I lost my mind”

“Cooking time 2 mins, delivery time 8 mins. A founder of “qcom for food” told me this and I lost my mind. We are suffering from the largest epidemic of poor nutrition and unhealthy processed and ultra-processed foods high in palm oil and sugar,” said Shantanu Deshpande, founder of Bombay Shaving Company in a December 16 linkedin post. “And now this.”

Companies offering these quick meals ensure that the quality of the food will not be compromised.

“At Bistro, we do not microwave processed frozen foods and send them to our customers,” Zomato said in an email response on December 18. “When you order from your nearest Bistro kitchen, we prepare fresh dishes by bringing together ingredients that are prepared in a central kitchen.

The food is prepared in “controlled environments to maintain quality” and “high hygiene standards are applied at every stage, from sourcing to final delivery,” said Shashank Shekhar Sharma, who runs Zepto Café, in an email. There is also rigorous training for staff and routine inspections, he added.

Maintaining delivery times on India’s busy and bumpy roads will be a challenge, according to Elara’s Taurani. Increasing the number of meals with a limited menu is another, he said.

But that’s not holding back service providers, including Swiggy, which has expanded Bolt to over 400 cities.

“Consumers just like things to be faster,” said Rohit Kapoor, general manager of Swiggy’s food market during the Dec. 3 earnings conference call, describing Bolt as “a big bet.” “We are very optimistic about the potential that this represents not only for this offering but also for the future of food delivery itself,” he said.