Get Instant Loan up to ₹10 Lakh!
BENGALURU: The food delivery industry, which was severely impacted by the covid-19 pandemic, is witnessing shoots of recovery with the overall sector clocking 85% of pre-covid gross merchandise value (GMV) in September as average value per order increases, foodtech unicorn Zomato said in a blog on Wednesday.
According to the blog, the food delivery sector has recovered to pre-covid levels in a number of large pockets of the country, led by some of the most affluent residential areas in the country.
While metros like Delhi and Mumbai are nearing full recovery, registering 95% of pre-covid order value, metros such as Bengaluru, Hyderabad, and Chennai are still behind the curve averaging around 80% of pre-covid levels.
Other cities such as Kolkata, Patna, Jamshedpur, Ranchi, and Siliguri have recovered completely and have exceeded pre-covid levels, Zomato said.
Zomato’s rival Swiggy, in a recent interaction with Mint, said it is seeing GMV back to almost 80% of pre-covid levels, with demand still varying across different regions in the country.
According to Zomato, the increase in average order value can be attributed to premium restaurants listing on food tech platforms, festivities moving to home, and consumer shift to bulk ordering behaviour for families, rather than individual orders.
“With more premium restaurants, i.e. restaurants where a meal for two may cost ₹1500 and above, 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% over pre-covid levels,” said Zomato founder and CEO, Deepinder Goyal, as a part of the blogpost.
In addition, with lockdown restrictions forcing celebrations to move back home, dormant customers are most likely to order from food aggregator apps during festivals, with occasions such as Raksha Bandhan, Janmashtami, and Independence Day resulting in order spikes.
“Customers, who had not ordered since the first day of lockdown, are 20% more likely to order for the first time during such festivals and occasions,” said Zomato.
Zomato also claimed that single person orders are also seeing a recovery.
“Recovery on single person meals, which constituted nearly approximately 60% of all orders pre-COVID, lingers at 50-70% level for most regions. On the other hand, orders with meals for 3 or more persons have recovered well and are higher than even pre-covid levels currently,” added Zomato.
Food tech players are also hinging their hopes on the IPL and the festival season which may increase the number of individuals ordering from restaurants, as matches are slotted in the evening.
“With IPL, people would like to focus on the match and order in food. Hence, we are hinging our hopes on this quarter, to get users back on to Swiggy, as we expect order frequencies to go up. IPL and other festivities could accelerate recovery by a quarter. We are already planning a new advertisement series to restore consumer confidence and will offer new constructs of deals, discounts, and gamification," said Swiggy's chief operating officer, Vivek Sunder.
Zomato believes that during the IPL and subsequent festival season, food delivery in both metros and smaller cities will make a full recovery, and resume growing over pre-covid levels.
During the peak of India’s lockdown order volumes among aggregators Zomato and Swiggy were down to as much as 20% of pre-covid levels, and climbed back to 45% by mid-June, according to data from RedSeer Consulting.
In its report in August, Zomato said even in cities where restrictions have been lifted, only 17% dine- out restaurants were open for business, as it predicted 10% of restaurants on its platform to have shut down permanently, and an additional 30% restaurants to not reopen at all.
Catch all the Business News , Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.