Zomato launches logistics services for merchants to take on Shadowfax, Dunzo

Zomato has ventured into logistics with the launch of Zomato Xtreme which will allow merchants to send packages starting at Rs 35.

The Deepinder Goyal-led company has rolled out a separate app for the offering, which is currently available only on Android devices. It aims to offer merchants quick and affordable deliveries to their customers' doorstep, according to the app's homepage.

The feature will help Zomato to take on players such as Shadowfax, Dunzo, and Borzo.

Moneycontrol was the first to report on the development.

Zomato declined to comment on the development.

The move indicates Zomato's intention to diversify its revenue streams beyond food and grocery delivery (through Blinkit). While food delivery remains its biggest business, the alternative verticals, such as Hyperpure and dining, could help the Gurugram-based company optimise costs by making use of its delivery partners network.

The firm launched Hyperpure in 2018, aimed at providing fresh vegetables, fruits and other daily utilities to restaurants. The company pegs Hyperpure to be its next growth frontier. Over the last two quarters, the supplies business has helped Zomato's topline to grow tremendously.

In December last year, Rakesh Ranjan, the then head of Hyperpure at Zomato, told YourStory that it plans to introduce a ready-to-eat line along with desserts and beverages as it expands its ready-to-eat range for restaurants.

Zomato recorded its first-ever quarterly profit in the April-June period with operating revenue rising 71% to Rs 2,416 crore from Rs 1,414 crore in Q1 last year, helped by massive growth in Hyperpure.

Zomato's shares on Friday closed 1.23% higher at Rs 111.20 apiece.

(The story was updated to reflect Zomato's share price and that the company declined to comment)