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Business News›Tech›Startups›Exclusive: Zomato Xtreme is coming back in a
different avatar



THE ECONOMIC TIMES DAILY NEWSPAPER IS AVAILABLE ONLINE NOW.

Read Today's Paper


EXCLUSIVE: ZOMATO XTREME IS COMING BACK IN A DIFFERENT AVATAR

SECTIONS
Exclusive: Zomato Xtreme is coming back in a different avatar
By
Pranav Mukul
, ETtechLast Updated: Oct 15, 2024, 08:23:00 AM IST
Synopsis


ZOMATO XTREME, USING THE COMPANY'S FOOD DELIVERY RIDER NETWORK, OFFERED
INTRACITY LOGISTICS SOLUTIONS FOR PACKAGES UP TO 10 KG, CATERING TO BOTH SMALL
BUSINESSES AND LARGE MERCHANTS. HOWEVER, THE SERVICE IS NOW BEING RECALIBRATED
AND TWEAKED TO FOCUS ON THE CORE FOOD DELIVERY STRENGTH OF THE COMPANY.

ETtech
After having suspended its hyperlocal logistics service Xtreme in July, food
delivery company Zomato is working on bringing back the offering – albeit in a
different avatar, people in the know said.

In its earlier version, Zomato Xtreme – which leveraged the rider fleet of the
company’s food delivery platform – was targeted at both small and large
merchants for intracity deliveries of packages weighing up to 10 kg – on the
lines of services provided by companies such as Flipkart-backed Shadowfax and
Tiger Global-funded Porter. It had also tied up with epharmacy platform Tata 1mg
for last-mile deliveries.



The focus of Xtreme, which was rolled out in October last year, is now being
recalibrated.

    
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“The service is being tweaked to focus on the core food delivery strength of the
company…there are several restaurants that deliver directly. This may still be
an experiment that the company may or may not scale,” one of the persons cited
above said.

As per the company’s annual report, Zomato had more than 400,000 active monthly
delivery partners in its food delivery operation. The company’s quick commerce
unit, Blinkit, operates with a dedicated fleet of riders.


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“There are several restaurants across cities who want to maintain their own
channels for ordering but want the quality of last-mile delivery that Zomato
offers…in the earlier experiment, too, the scale never became so big that it
would affect the company’s food delivery services for its restaurant partners
but if it ends up achieving a certain scale, it will take a call accordingly,”
another person briefed on the development said.



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The person said the business model for the new offering is being worked out, but
it is expected to be on the lines of Zomato’s current distance-based fee
mechanism. The project was being run by Zomato’s food delivery team.



Responding to a set of queries by ET, a Zomato spokesperson said, “These claims
are baseless and not true.”

Zomato’s food experiments

The Gurgaon-based company has experimented with its food delivery service
through multiple features and offerings.

These include the intercity delivery service Zomato Legends, which was fully
shut down in August. In 2022, the company was also experimenting with 10-minute
food delivery in Gurgaon – which it later repurposed into Zomato Everyday, its
“homely meals service”.

It recently also rolled out Brand Packs, allowing users to buy coupons for
additional discounts on food delivery from restaurants they order frequently.

Despite the rapid growth in quick commerce, food delivery is still the largest
business for Zomato – comprising almost 60% of its gross order value (GOV) from
all business-to-consumer (B2C) verticals. In the June quarter, Zomato reported
Rs 9,264 crore in GOV from its food delivery business, 26% higher year-on-year.

Speaking at The Economic Times Startup Awards on October 5, Zomato founder and
CEO Deepinder Goyal said the food delivery use case deserved to be on a separate
app.

Zomato is planning to move the dining out offering – which shares space with
food delivery on the platform’s main app – to the upcoming District app.
District will encompass all of Zomato’s going-out businesses including dining
out, entertainment and live ticketing. "Dining out is part of the main app...but
I don't really want it to be there. The food delivery use case deserves to have
a separate, standalone app," Goyal said at the ETSA. He also pointed out that in
food delivery, the moat for any company is the number of riders it has available
on the ground.

On Monday, Zomato’s shares ended trading 0.8% up at Rs 279.80 on the BSE.




    
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READ MORE NEWS ON

ZomatoXtremefood deliveryquick commerceBlinkitTata 1mgShadowfaxPorterzomato



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