India’s Zomato Touts New Investment In Pivot Back To Grocery Delivery

In today’s digital food delivery market, the restaurant and grocery categories are running together. In advance of its initial public offering (IPO) on July 14, senior executives from India-based restaurant delivery service Zomato, which operates in nine countries across three continents, revealed at a press briefing Thursday (July 8) that the company plans to return to grocery delivery on a more permanent basis, after a brief grocery stint under the name Zomato Market that launched in April 2020.

“Grocery is a large opportunity, and it is in the nascent stage right now, but growing rapidly,” Zomato Chief Financial Officer Akshant Goyal said during the briefing, Mint reports. “We think our platform lends itself well to us doing more than what we do today.”

The news of Zomato’s grocery intentions comes as, around the world, lines blur. In the United States, DoorDash recently announced a major partnership with grocery chain Albertsons Companies to utilize the restaurant delivery service’s network of drivers to fulfill groceries orders within the hour, a move that challenges Instacart’s hold on third-party grocery delivery. In the United Kingdom, meal delivery service Deliveroo delivers groceries from many of the country’s top supermarket and convenience chains, and Netherlands-based delivery service Just Eat Takeaway.com recently expanded its German meal delivery service to take on the grocery category. For Zomato, the move into grocery on a non-quarantine basis is beginning not in-house but through its investments.

“We are actively experimenting in the [grocery] space, and recently invested $100 million for a minority stake in [India-based online grocer] Grofers, with the idea of getting more exposure to that space and building our own strategies,” said Goyal.

This will likely not be a global effort. The company revealed in its April prospectus that, despite having a presence in 23 countries, it has “taken a conscious strategic call to focus only on the Indian market going forward.”

As businesses that primarily offered prepared meals get into grocery, so too are grocery stores offering more prepared meal options, combining the categories into one connected eat pillar. Take, for instance, Midwestern supermarket chain Hy-Vee’s Mealtime To Go prepared meal curbside pickup service or grocery giant Kroger’s Home Chef prepared meals. Meanwhile, many restaurants have been, since the start of the pandemic, getting into selling ready-to-cook meal kits and packaged foods, moving further into the grocery space.

“Take eat — a pillar that reflects the blurring of the lines between the verticals that people use to buy, prepare and consume their food,” Karen Webster wrote in a recent story on how consumers behave in today’s connected economy. “Eat is a new ecosystem that reflects how businesses and people use connected devices, apps, payments and other technologies to satisfy the consumer’s very basic need to get and consume food.”

While grocery once accounted for the vast majority of food eaten at home, the rise of restaurant delivery has also played a role in making the two categories more similar. PYMNTS’ study, The Bring-It-To-Me Economy: How Online Marketplaces And Aggregators Drive Omnichannel Commerce, created in collaboration with Carat by Fiserv, finds that two-thirds of consumers are now ordering restaurant meals to be eaten at home, and restaurant customers are 31 percent more likely to order for off-premises consumption than on-premises. By noting the connection between consumers’ grocery habits and their restaurant habits, Zomato has a chance to become a key part of the overall eat category.