The company revealed at a press conference on Thursday that Zomato plans to soon launch an online grocery delivery service on its app. The new attempt by the Gurugram-based restaurant aggregator will be its second attempt after shutting down the initial grocery delivery model introduced during the nationwide lockdown last year. Prior to the initial public offering (IPO) scheduled to go live on July 14, Zomato announced a new statement to enter the field of online grocery delivery. Zomato’s goal is to raise rupees. The issue of 9,375 crore rupees through the newly issued shares will be priced between rupees. 72 and rupees. 76.
During a virtual conference call, Zomato stated that it plans to launch its grocery delivery service “from an experimental perspective.” The service will be provided directly through the Zomato app.
Zomato first entered the grocery delivery market in April last year and began providing services in more than 80 cities shortly after the government imposed a nationwide lockdown. However, the service was shut down a few months after its launch.
Zomato co-founder Gaurav Gupta said: “Last year, when we made groceries, our customers needed an hour.” “People don’t use takeaway services, they need to buy groceries at home to cook everything Food. And we, thanks to our network, are able to serve our customers quickly… Now, we will come back and see as an attempt to see how we build this hyper-local part of the business.”
It is unclear whether Zomato will work with local kirana retailers to provide grocery delivery services through its platform, or go to virtual convenience stores (also known as dark stores). The latter is the model adopted by Swiggy in its local hyper-local grocery delivery platform called Instamart.
Earlier this month, Zomato sought to acquire an approximately 10% minority stake in Grofers, an online grocery delivery platform. It also announced during the conference call that it holds a US$100 million (approximately Rs 7.47 billion) stake in Grofers. However, Akshant Goyal, chief financial officer of Zomato, clarified that the investment in Grofers is separate from the plan to launch its local grocery delivery service.
Zomato’s return to the grocery delivery field may bring an uphill battle for its main competitor, Swiggy, as it has been providing grocery delivery services through Instamart since August. However, companies including Amazon and Flipkart are also working to strengthen their grocery delivery models to expand their e-commerce footprint in the country.
At the same time, BigBasket, supported by Grofers and Tata Group, is trying to expand its business scale to stay strong in the competition. BigBasket also recently received an investment of Rs. 9,500 crore from Tata Digital.
In addition to existing players, Reliance Industries is building its JioMart as the country’s next major competitor in the online grocery delivery market. This conglomerate has received support from technology giants including Google and Facebook and can compete.
As the COVID-19 pandemic forces Indian consumers to start looking for online alternatives to nearby offline stores, grocery delivery has attracted large companies.A report by the consulting firm RedSeer estimates that the total merchandise value (GMV) of the entire online grocery market in India is expected to be USD 24 billion (Approximately Rs 1,794 crore) by 2025. Last year, food and groceries accounted for 7% of the Indian e-commerce retail market.