Zomato, the prominent food delivery platform, is gearing up to relaunch its hyperlocal logistics service, Zomato Xtreme, but with a fresh approach. After suspending the service in July, the company is recalibrating its strategy to concentrate on its core food delivery strengths, leveraging its extensive rider network for more focused operations.
The Evolution of Zomato Xtreme
Originally launched in October last year, Zomato Xtreme offered intracity logistics solutions for packages weighing up to 10 kg. The service targeted both small businesses and larger merchants, utilizing Zomato’s existing food delivery rider network to provide efficient delivery options. Competing with logistics services from firms like Flipkart-backed Shadowfax and Tiger Global-funded Porter, Zomato Xtreme also partnered with the epharmacy platform Tata 1mg for last-mile deliveries.
However, the company recognized the need to pivot its approach. Sources familiar with the matter indicate that Zomato Xtreme will now be tailored to enhance its food delivery capabilities. The adjustments are designed to align more closely with Zomato’s main business model, which remains centered around food delivery.
Focus on Core Strengths
In this revamped iteration, Zomato aims to streamline its offerings to better serve its restaurant partners. “The service is being tweaked to focus on the core food delivery strength of the company,” noted an insider. With numerous restaurants preferring to maintain their own ordering channels while benefiting from Zomato’s high-quality last-mile delivery, the potential for a successful relaunch is promising.
Despite the initial setbacks, the previous version of Zomato Xtreme did not scale significantly enough to impact the company’s food delivery operations adversely. The decision to recalibrate was fueled by Zomato’s commitment to provide an enhanced delivery experience for its partners and customers alike.
Future Plans and Business Model
Zomato is actively working on the business model for this new service. While specifics remain under wraps, it is anticipated that the model will resemble Zomato’s existing distance-based fee mechanism. The logistics project is being spearheaded by Zomato’s dedicated food delivery team, aiming for a seamless integration with their current operations.
Zomato’s Diverse Offerings
Zomato has a history of experimenting with its food delivery service, evidenced by various initiatives. Notably, the company previously launched Zomato Legends for intercity delivery, which was fully discontinued in August, and attempted a rapid 10-minute food delivery service that evolved into Zomato Everyday, catering to home-cooked meals.
Additionally, Zomato has recently introduced Brand Packs, allowing customers to purchase discount coupons for frequent orders from their favorite restaurants. Despite the growing popularity of quick commerce, food delivery continues to represent the majority of Zomato’s business, accounting for nearly 60% of its gross order value (GOV).
Final Thoughts
Zomato exhibits its flexibility in the changing logistics environment as it gets ready to relaunch Xtreme. Zomato is well-positioned to offer improved delivery options and maintain its position as the industry leader in food delivery by focussing on its core skills.
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