Amidst rising concerns about 10-minute food deliveries, Zomato founder and CEO Deepinder Goyal told the company’s restaurant partners that Zomato as a restaurant aggregator will “never compete” with them. In a note shared with MediaNama, the company discussed its 10-minute food delivery app Bistro stating that the service is “not a private label or a Zomato Kitchen.” This comes as reports suggest that the National Restaurants Association of India (NRAI) is planning to file a court case against Zomato and Swiggy for their 10-minute food delivery services.
“Bistro is a separate app, and its menus are curated using publicly known snacking patterns. The Bistro team has no access to data that would create an unfair playing field,” Goyal mentioned. His comments about access to data are particularly relevant in the context of the draft Digital Competition Bill, 2024 which states that companies cannot use non-public data of their business users (which in this case would be restaurants on Zomato) to compete with them. NRAI has, in the past, alleged that private labels on Zomato and Swiggy use data from the companies’ restaurant partners. Similarly, according to an ET report about NRAI’s plans to file a court case against the two, the industry body is concerned about private labeling and data sharing. Further, it adds that restaurants believe that platforms like Swiggy and Zomato’s standalone 10-minute food delivery services Swiggy Snacc and Zomato’s Bistro are using their own kitchens to prepare items in 10 minutes.
What are Zomato’s plans with Bistro?
Bistro is an offering by Zomato’s sister company Blinkit. This service targets the large in-office market that wants quick access to snacks, meals and beverages. This market currently meets their needs through food vendors near their offices or through vending machines.”While we’re unsure about finding product-market fit and profitability, our hope is that this platform co-replicated by different restaurants and cuisine types where demand exists,” Goyal mentioned.
He said that even if Bistro opens up 1000 outlets to cater to this market segment, it would barely make it 0.5% of the total restaurant market. “Also, scaling Bistro isn’t the goal of this experiment,” he added, explaining that not everything can move to 10-minute deliveries with gourmet food having its own space. Goyal said that many restaurants are working to currently partner with Bistro and provide food through it.
Need to reduce delivery time:
Goyal emphasised that bringing down delivery times helps with the demand for restaurant food. He mentions that since Zomato started controlling delivery operations for food on its service in 2018, delivery times went down from 45+ minutes to about 30 minutes. “Our data shows a 3x higher repeat rate from customers when delivery time is under 15 minutes, compared to more than 30 minutes. This means that reduction in delivery times will significantly expand the market,” he adds. However, he did not elaborate on how market demand correlates with such reductions.
To reduce delivery times, Zomato is trying to make its kitchen network more dense (adding more outlets per city) and cut kitchen preparation time. The company experimented with this back in 2022 through Zomato Instant which while ‘moderately successful’ in reducing kitchen preparation time was unsustainable because Zomato did not find the right economic model for restaurants. According to reports from 2023 when Zomato shut down this experiment, delivery workers were struggling to make the delivery time in the project’s pilot in Gurgaon.
Shorter delivery times under Zomato app:
It’s important to note that the company is making two separate attempts to reduce delivery times: one within the Zomato app and another through Blinkit’s Bistro.
Goyal said that a few weeks ago, the company began allowing restaurants to offer 15-minute food delivery in select locations. For this, Zomato curates menu items for the service with a dedicated delivery fleet. So far, this service is only available in select locations, and the company plans to scale it based on “desired outcomes.” The company is also “discussing reduced commissions for short-distance orders to encourage more outlet expansion to improve the delivery speed,” he said.
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