Online food delivery orders for Zomato and Swiggy have dropped 70% in the last 10 days to under 1 million a day, as customers step back and top restaurants shut shop amid a lockdown induced by the Covid-19 virus outbreak, said investors, companies and restaurants to ET.
“From a steady state of 2.5 million deliveries a day, today we are at sub 1 million orders which are marginally inching up,” said an investor in the food delivery space.
In the first two weeks of March, which was before the lockdown, food delivery orders declined 20%, according to RedSeer Consulting, which has forecast a further drop in future, without specifying the actual number.
The main food delivery apps grappled with bottlenecks in the first few days of the lockdown such as delivery staff allegedly being harassed by police. Swiggy said about 60 to 70% of its cities are still shut for food delivery including few prominent ones like Vizag, Vadodara, Guwahati, Indore. However, the businesses now also face other challenges, including winning back customer trust about food hygiene and bringing back more restaurants on to their platforms.
“Not more than 20% restaurants must be live during this time… and with the very few operating …the volumes for live ones is around 40% that of normal volume,” said Anurag Katriar, president of the National Restaurant Association of India.
Katriar, who runs eGustibus Hospitality and multiple delivery brands including Neel ki Biryani, Indigo Burger Project and Indigo Deli, has also shut his businesses.
Dominos, which has been operational during the lockdown, is using part of its infrastructure to deliver grocery essentials, to increase utilization of its delivery boys and get on-ground curfew passes for operations.
However, most other top brands are shut. These include Truffles, Olive Pizzeria, Olive, Monkey Bar, Soda Bottle Opener Wala, Fatty Bao, Smoke House Deli, Salt Water Cafe, Socials, and Smoke House Deli. Zomato did not respond to ET’s email seeking comment.
The same trend has played out in China, where Meituan Dianping – the country’s largest food delivery service saw sales from food business drop by half, in February, as per the company. For Swiggy, which counts Meituan Dianping as an investor, other business lines like concierge and grocery delivery services are likely to marginally bump up overall utilization numbers.
Both Swiggy and Zomato have expressed interest in delivering grocery and essential items as a service. Zomato has partnered with Punjab government to deliver essentials and has also struck a partnership with Grofers to delivery from kirana stores.
The food delivery space, which touched 3.2- 3.5 million deliveries in October, has slowed down since, hurt by various factors including rationalising of discounts and the sale of Uber Eats India to Zomato.
In January, delivery volumes fell by about 7% after UberEats – which was doing about 470,000 orders a day – was sold to Zomato and ceased independent operations. However, both platforms were able to maintain a 1-2% growth rate till the outbreak led to the lockdown.
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