Zomato now in 500+ cities, says 35 pc order volume comes from Tier III & IV locations in India

Foodtech unicorn Zomato on Tuesday announced that its food delivery service is now available in 556 cities across India. Founder and CEO Deepinder Goyal highlighted in a blog post that Zomato delivers 1.3 million orders a day from 150,000 restaurants across India, with more than 10 orders per restaurant per day. 

According to Goyal, Tier III and IV cities are relatively small but are growing at a frenetic pace, and now contributes 35 percent of the monthly order volume. 

He said, Zomato’s delivery business economics in non-metro cities is superior to metro cities as the ability to hire in these markets is high, operating costs are low, and CACs (Customer Acquisition Cost) is negligible.

“Out of the total delivery partner network in non-metro cities, 20 percent are on bicycles. Hence the cost of delivery is lower by 50 percent as compared to the metro cities. Also, the delivery times are 3 minutes less than the larger cities – most of it because of lack of traffic,” Goyal said.

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Goyal also mentioned that a majority of the launches across the smaller cities reached the initial 1,000-orders-a-day milestone within a few weeks.

"There are no delivery zones in most of these towns – we deliver from any restaurant to anywhere in these towns,” he added.

In order to tap the huge delivery opportunity across tight geographies in a planned manner, Goyal said, the company is committed to developing cloud kitchens across these geographies to bridge the supply gap. 

“We will never compete with our restaurateur partners – we will only build the kitchens – but they will be operated by restaurant brands,” he added.

Currently, Zomato kitchens are operational in 50 cities across India, with 110 kitchen hubs (either completed or under construction). In total, there are 663 kitchen units and kiosks.

“Over the next few years, we estimate our food delivery business to grow to numbers. We think there are about 200 million people in India who will order food from Zomato about 5 times a month, with the top 20 million cohort amongst these ordering more than once a day, every day,” Goyal said.

(Edited by Megha Reddy)

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