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Food delivery industry in India has almost recovered: Zomato

Written by Moulishree Srivastava Published on 

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Although restaurants have been operational for the last three months, consumers have largely stayed away from eating out.

Food delivery companies that suffered a major setback when the pandemic hit India in March, have almost bounced back and are now touching 85% of sales they were clocking before the onset of COVID-19.

In a report published on Wednesday, Gurugram-based food delivery giant Zomato said the food delivery industry has continued to steadily grow back to the pre-COVID-19 levels, with the overall sector reaching over 85% of pre-COVID-19 Gross Merchandise Value (GMV), up from about 75% last month.

Deepinder Goyal, CEO and founder of Zomato, sharing the findings of the report, in a blog post said the recovery is led by a number of large pockets of the country which include some of the most affluent residential areas.

“Within most cities, the affluent parts of the city are driving this recovery,” he said.

With more and more premium restaurants going online, a larger number of affluent consumers are embracing online food ordering, he added. According to the report, overall spends on such premium restaurants have grown by more than 25% of pre-COVID-19 levels.

Delhi and Mumbai are close to making a full recovery, reaching 95% of pre-COVID-19 levels, the report said, while South Indian metro cities such as Bengaluru, Hyderabad, and Chennai are still behind the curve, at 80% of pre-COVID-19 levels. Another metro city, Kolkata, is now seeing the sales at par with the pre-COVID-19 levels.

Interestingly, some smaller cities like Patna, Jamshedpur, Ranchi, and Siliguri have recovered completely and have exceeded pre-COVID levels.

“With lockdown restrictions, celebrations have moved back home,” Goyal said. “Festivals and occasions such as Raksha Bandhan, Janmashtami, Teacher’s Day, and Independence Day saw a massive spike in orders.”

“As customers spend more time with their families, group ordering has become more relevant than ever,” he added.

LocalCircles, an online platform for consumer feedback which works with several government departments in the country, said Monday that although restaurants have been operational for the last three months, consumers have largely stayed away from eating out due to the fear of COVID-19. “Food Aggregators like Swiggy and Zomato have been reporting approximately 50% of sales recovery as compared to pre COVID-19 including the supplies of groceries and essentials which they commenced in April 2020,” it said.

According to Zomato’s findings, orders with meals for three or more persons have recovered well and are higher than even pre-COVID-19 levels currently. Furthermore, order sizes (items per order) have increased by 20% over pre-COVID-19 levels.

However, single-person meals, which constituted nearly 60% of all orders before the healthcare crisis, lingers at 50-70% of the pre-COVID-19 level for most regions, the report noted.

Goyal believes that with the ongoing IPL season and the subsequent festival season, food delivery in both metro and smaller cities will make a full recovery soon and resume growing over pre-COVID-19 levels.

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