Affluent users driving food delivery business to pre-COVID levels, says Zomato

Foodtech major Zomato has said its food delivery business has recovered to 85 percent of pre-pandemic levels.

In a blogpost, Deepinder Goyal, Co-founder and CEO of Zomato, said, its food delivery segment has recovered to (and even grown beyond) pre-COVID levels in a number of large pockets of the country, led by some of the most affluent residential areas in the country.

He added that cities like Delhi and Mumbai are nearing full recovery (95 percent of pre-COVID), metros such as Bengaluru, Hyderabad, and Chennai are still behind the curve (80 percent of pre-COVID). And, some cities such as Kolkata, Patna, Jamshedpur, Ranchi, and Siliguri have recovered completely and have exceeded pre-COVID levels.

Deepinder said that since Zomato published its first mid-COVID Report in August , the food delivery industry has shown stronger signs of recovery.

"It continues to grow back steadily to pre-COVID levels, with the overall sector clocking over 85 percent of pre-COVID GMV (Gross Merchandise Value), up from 75 percent+ last month," he writes.

Sharing some of the trends, the Zomato chief added that in most cities, the affluent parts of the city are driving this recovery. With more premium restaurants now opening up to online delivery, a larger number of affluent consumers are embracing online ordering. Overall spends on such premium restaurants have grown by over 25 percent compared to pre-COVID levels.

"Customers are now relying on food delivery even more than usual when a city goes under a lockdown. Some cities such as Kolkata are seeing more customers ordering online when the city is (more or less) shut, but restaurants are open," shared Deepinder in the blog.

He added that with lockdown restrictions, celebrations have moved back home. Festivals and occasions such as Raksha Bandhan, Janmashtami, Teacher’s Day, and Independence Day saw a massive spike in orders.

Customers who had not ordered since the first day of the lockdown are 20 percent more likely to order for the first time during such festivals and occasions.

Zomato is also seeing larger orders as people are spending more time with their families and group ordering the food. This has resulted in 20 percent increase in items per order. Deepinder also shared that recovery on single person meals, which constituted nearly 60 percent of all orders pre-COVID, lingers at 50-70 percent level for most regions.

"On the other hand, orders with meals for three or more persons have recovered well and are higher than even pre-COVID levels," he added.

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With the ongoing IPL season and the subsequent festival season, Zomato expects food delivery in both metros and smaller cities to make a full recovery and resume growing over pre-COVID levels.