Swiggy steps on the gas on 10-minute food delivery even as Zomato hits the brakes
Swiggy's Bolt is now live in over 500 cities just as Zomato Quick looks at shutting down operations amid lack of incremental demand.
Food delivery giants, Swiggy and Zomato, are pursuing different strategies for 10-minute delivery as they respond to a sector-wide slowdown and mounting pressure on customer experience and infrastructure.
Sriharsha Majety-led Swiggy's Bolt is now live across 500 cities in about six months. Bolt, which offers a limited assortment of food within a two-kilometre radius, is working with 45,000 restaurant brands and accounts for more than 5% of Swiggy's total food delivery orders.
This is in stark contrast to Zomato, which announced its plans to shut down Zomato Quick, citing a lack of incremental demand from the offering. Zomato Quick, which offered a promise of 10-minute food delivery instead of the usual 30-minute delivery, was launched as an experiment earlier this year to compete with Swiggy Bolt.
"The current restaurant density and kitchen infrastructure is not set up for delivering orders in 10 minutes, which leads to inconsistent customer experience," Zomato's parent Eternal said in its quarterly shareholder report yesterday.
For Swiggy, new users acquired through Bold are showing 4% to 6% higher monthly retention than average, while restaurants are seeing higher repeat orders and scale-up in daily orders, the company said in a press note.
Food delivery for both platforms has been seeing slower growth, Zomato clocked mid-double-digit growth in total volume in the current quarter. Swiggy is yet to report its fourth quarter results.
"What we've realised is that this (bringing down delivery time to 10 minutes) is extremely hard, and we don't see any incrementality in demand if we do that, given that the customer experience is poor. But of course, there's a wide range between 10 and 30 minutes. So our view is that we should try to bring that 30 minutes down to maybe 20 or 25 minutes over time by making our overall logistics fleet and delivery system more efficient. Those are the gains we want to chase now, rather than trying to build an extremely quick service, which, without end-to-end control of the supply chain, we think is extremely hard to do," noted Co-founder and CEO Deepinder Goyal, Eternal.
The 10-minute food delivery space is also seeing competition from budding startups and other quick commerce players. Zepto Cafe is closing in on a $100 million annualised GMV run-rate while startups like Swish and Zing are on rapidly expanding in pincodes across Bengaluru and Delhi, respectively.