What Is the Zomato 10 Min Delivery Model And How They're Trying To Achieve It - Savage & Palmer - Enabling Entrepreneurs

What Is the Zomato 10 Min Delivery Model And How They’re Trying To Achieve It

by | May 4, 2022 | Business Strategy | 0 comments

What is the first thing you think of when hunger strikes? Ordering a wholesome meal from your favourite restaurant, right? 

There is no denying that food delivery apps have taken centre stage in all our lives, and there is no going back now as ordering in has become the new normal. 

Zomato, the now 5.4 billion dollar business, was founded in 2008, and began as a simple platform to give recommendations to customers looking to dine out. In a nutshell, the strategy of Zomato was to lay out concrete information and menus of restaurants and provide a basic rating of these restaurants to their customers. However, they’ve been evolving constantly. With time, the company evolved into delivering food orders that were placed by their clients on Zomato’s platform. Zomato also partnered with restaurants in different cities to boost sales and engage new customers. Customised services like Zomato Gold made customers feel unique and important.    

Duopolies in the food delivery industry. 

Too tired to cook dinner? Or, don’t want to head out after a long tiring day? 

You know the saviour – Swiggy and Zomato! 

It’s almost impossible to choose which food delivery platform is better, as we all have both these apps installed on our mobile phones. This indicates the duopoly of these food delivery platforms in the Indian market. There is stiff competition between these brands; from discount coupons to offers, packaging quality, delivery time, advertising strategy, etc. As the stats suggest, the share price of these companies notices a constant valuation. The current share price of Zomato is around Rs. 84, while Swiggy’s share price is not yet published. Swiggy registered a 56% growth in customers last year while Zomato shows 1.1 million subscribers with its services. These numbers are enough to show the competition between the two companies, and their domination of the food delivery industry. 

Zomato’s new 10-min delivery model: Explained 

Beating the competition may be challenging, but Zomato has proved that you can stand out from the rest with the right marketing strategies. Have you ever heard of ‘Foodiebay’? Think twice, because this used to be Zomato’s name. The company has shown immense growth; from providing menus and restaurant locations to customers looking to dine out, to its evolution to a food delivery app and the recent Zomato ‘10-min’ delivery scheme. 

Zomato intends to execute its 10 min delivery plan by building a ‘Cloud or Dark Store’ in areas of high demand. Before we understand what a dark store is and how it works. Let us discuss the reason behind initiating the 10-min delivery plan.  

Quick commerce played an important role 

The assumed notion of quick commerce was actually only built relatively recently, when the pandemic forced everyone to sit at home and take advantage of online businesses and deliveries. During this period, waiting for orders for two days or weeks was unacceptable, and customers demanded fast deliveries. 

The increased demand for fast-paced deliveries forced e-commerce sites like Amazon and Grofers to provide instant deliveries. If you are on a shopping spree and are located in a metro city, you would know that ordering electronic items, mobile phones, and laptops is very convenient. Your order is usually delivered by the next morning, or sometimes even on the same day. Initially, food delivery would also take approximately an hour or 30 minutes. However, changing scenarios and rising competition led Zomato to follow the concept of quick commerce, and launch their fast 10-min delivery service. 

Why launch a 10-minute food delivery plan? 

A primary reason behind the immense success of Domino’s was their 30-minute guaranteed delivery. Domino’s has been following this strategy for almost 10 to 15 years, so why can’t other brands do the same? The strategy makers behind the scenes at Zomato, understood that the time slot of 30-minute fast delivery would soon become obsolete. This idea of fast delivery can potentially boost demand and revenue exponentially, and give them a one-up on the competition. 

Zomato took the initiative and came up with the plan to launch the 10-min delivery scheme, to meet increasing demand and gain customers who were not ready to wait any longer. 

How do ultra-fast delivery apps work? 

After Covid, many online delivery apps started ultra-fast delivery for their customers. Ultra-fast grocery delivery apps like Zepto, Instamart and Blinkit were already delivering food items and essentials within short time periods. But, what makes Zomato different is that they deliver hot and freshly cooked food to your doorstep in just 10 minutes. Zomato narrowed down the strategy of ultra-fast delivery and partnered with Blinkit, earlier known as Grofers, to make the 10-minute delivery possible. 

Ultra-fast delivery apps work by establishing a storehouse or warehouse in an area with high demand. They collect the essentials as soon as the order is placed and make fast deliveries to your doorstep. 

How have dark stores and AI changed the game? 

About a year ago, would you have believed it if someone told you that you could get freshly cooked hot food in just 10 minutes? 

No other food delivery app in the world has this fast service on fresh foods and cuisines. Zomato has long-planned this scheme in order to compete and remain at the top of the market. Getting to the Dark stores or Cloud Kitchens, these are well-built warehouses that will be established only in metro cities during the initial days. With the help of artificial intelligence and databases of customer records, Zomato will analyse the geographical areas with the highest demand, and what time is most likely to be rush hour in these areas. Also, they will list the most ordered cuisines or food items in that particular area, and keep things prepped and ready to go. Once you place the order, the food will be freshly-prepared, and the nearest rider available will deliver the food to you.  

Breakdown Of Zomato's 10 Min Delivery

Pros and cons of the new 10-min model

Though the idea of 10-min food delivery is exciting, it is receiving a fair amount of backlash from some netizens. We are well aware of the benefits of fast food delivery, such as saved time, hot and fresh food, enhanced customer service, better opportunities for restaurants, and more job opportunities across the board. However, the concerns raised about this fast delivery service must not be overlooked either. 

Uncertainty about the quality of food 

Zomato has assured its customers that it will provide freshly cooked food prepared in a hygienic environment. However, common sense would dictate that there is still a higher chance of you receiving improperly cooked food, raw meat etc. when the food is being prepared in a hurry, and the staff is under the pressure of successfully delivering the same within just ten minutes. 

Peak hours could hinder the fast delivery 

Promising a delivery at peak hours can be tricky, as peak hours are more prone to traffic jams, and restaurants receive even more crowds during those hours. To enable this, Zomato intends to rely on their dark rooms or cloud kitchens. Though it might sound like they’ve got everything under control, peak times and rush hours are bound to result in traffic jams and other uncertainties, affecting the 10 min delivery plan’s success. 

The burden on an already overworked delivery person network 

We are all human beings, and overexertion is not healthy for anyone. This could be the case for the Zomato delivery executive network as they zip around trying to fulfil Zomato’s 10 min delivery promise. The increased chances of road accidents, cases of rash driving, and traffic light violations will likely affect several riders’ careers and lives. Also, delivering food later than the promised time slot could result in bad customer reviews, affecting the incentives and salaries of the employees.

It is important to note, that Zomato has specified that their 10-min delivery model will not rely on the driving speed and capability of their delivery executives, but how it actually ends up playing out remains to be seen. 

Climatic issues

10-min delivery is not an easy task with changing weather conditions in India. Heavy rains, chilly winters, and scorching heat could damage the food and impact the rider’s health. 

The future of the delivery industry 

With further development of AI in every aspect of human life, food delivery services are likely to harvest its potential to incorporate a business model that seemed impossible some years ago. They can generate information and analyse the population in a certain area to distinguish their needs like, what they like, where they live, what is the prime time for a person to order a meal, etc. Almost anything is possible because of the advances in AI technology. 

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