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Is Zomato's 10-minute delivery plan viable?

Experts say that this model might work only in grocery space.

Published: 27th March 2022 07:38 AM  |   Last Updated: 27th March 2022 07:38 AM   |  A+A-

Zomato delivery partner

Zomato delivery partner

Express News Service

Food aggregator, Zomato’s plan to roll out a 10-minute food delivery feature continues to remain a debated topic, as delivery personnel, the restaurant community and industry leaders in the ultra fast delivery space TNIE spoke to raised safety concerns and called it a difficult service to succeed. 

“It is very difficult to deliver in 10 minutes. Most of the time, delivery in a 1 km radius takes 15 minutes due to traffic. This may also lead to road safety concerns among us if we are asked to meet the stipulated time period,” said Arun Tomar, a delivery partner with Zomato for the last 3 years. Tomar grosses around R900 a day. He said rising petrol and food prices is a big concern, as it takes away R300-350 of daily earnings, leaving him with a net income of R550-600 on most days. 

Umesh Dibakar, another Zomato delivery partner, said that delivery in 10 minutes, especially during peak hours, is very difficult. “It all boils down to restaurants, and how much time they are taking to hand over the order. If we receive the order in no time and delivery is just a few blocks away, then this system might work,”said Dibakar. He, however, added that, going by the past and current experience, most food places, which include quick service restaurants, handover the parcel to us in 5-10 minutes. This alone makes the model unviable.

Likewise, a store manager of a large biryani chain and a momos chain, sounded skeptical when asked about the 10-minute delivery offering. Both have similar things to say. “Heating, proper packaging and successful handling take 4-5 minutes. Can the delivery boy deliver the food in the remaining 5 minutes? Highly doubtful.” 

On March 22, Zomato CEO Deepinder Goyal took to Twitter to announce his company’s 10-minute delivery feature. In no time, this announcement received widespread criticism with Karti P Chidambaram, Member of Parliament from Sivaganga, calling it absurd and saying it will put undue pressure on delivery personnel. 

Goyal then clarified that the delivery will be for specific nearby locations, popular and standardised menu items, which include food items such as maggi, bread omelette, poha, coffee, chai, biryani and momos. He added that the company was building “new food stations” to enable this service in specific locations. 

Challenges galore

However, the clarification did little to cool down critics and industry people from raising concerns. Kumar Setu, Co-Founder - CCO, Sprink says this 10-minute delivery model has more than a few challenges and this ultimately could negatively affect the sustainability of such business models and profitability aspects in the longer run.

Sprink is an online subscription-based home-made food delivery platform. Even with super AI data prediction, it is hard to predict on a micro level, what the customer will want to eat on a given day as the decision is based on many factors that affect the customer decision.“It will be tougher to aggregate demand for such a smaller SKU and bring out profitability per delivery,” Setu said.

Also, about 70% of customers want variety when they order and that’s also one of the significant reasons for going and checking out an aggregator app. There might be the rest of 30% who might choose quick delivery over having variety in food. Experts also believe that setting up a dense network of finishing stations might solve the proximity problem but it greatly affects the quality of the food served.

There is a higher possibility that at the finishing stations is not actually freshly prepared food but food that’s kept in cooked/half cooked state until the order comes through. Pre-cooked, pre-stored food that’s reheated and dispatched is not really fresh food and might affect the food quality adversely.National Restaurant Association of India Secretary General Prakul Kumar says while we do recognise that the modern day’s lifestyle requirement needs faster food delivery, but food quality and experience should not be compromised.

ALSO READ |Will Zomato's 10-minute Instant delivery services break traffic rules?

When the quick delivery model is applied in the grocery space, it has a potential for growth irrespective of road and traffic conditions, say experts. Zepto and Blinkit operate in this model. The 10-minute delivery concept will evolve with time. It will be based on the parameters such as the number of minutes the customer is actually willing to wait and the actual cost of delivering the items within those minutes, Setu added.

Though many experts talk about the challenges and viability of this model, Rajat Tuli, partner, Kearney, a consultancy firm, believes it is possible to deliver within 10 minutes, however, the nuance lies in what item gets delivered.“If it is ready to eat or an item that requires minimal processing or assembly, then it is easier to deliver within 10 minutes without compromising quality. However, if an item requires an extensive preparation, those items may not be amenable for a 10-minute quick delivery,” he adds. 

SaaS based supply chain platform Vinculum enables omnichannel retailing. Its Country Sales Head Sumit Karranji said customers place the orders on hyper-local apps. Such orders flow to the nearest dark store (small 150 sq. ft) where the products get shipped by the rider available in that pin code.

Growth potential

When the quick delivery model is applied in the grocery space, it has a potential for growth irrespective of road and traffic conditions, say experts. Zepto and Blinkit operate in this model.



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