Zomato Projects 30% Annual Growth For Food Delivery Business Over Next 5 Years

The rapid expansion of delivery apps in India—spanning everything from groceries to meals—has been fueled by rising demand from the growing affluent and middle-class populations in major urban centres

Ranjan expects the company to sustain this growth rate over the next four to five years, "if not longer," driven in part by expanding its restaurant partnerships

Source : PTI

Food delivery giant Zomato anticipates its core meal delivery business will grow at an annual rate of 30 per cent over the next five years, according to Rakesh Ranjan, CEO of Zomato's food delivery division. Ranjan also highlighted the recent listing of SoftBank-backed competitor Swiggy as a positive sign for the sector’s overall growth.

The rapid expansion of delivery apps in India—spanning everything from groceries to meals—has been fueled by rising demand from the growing affluent and middle-class populations in major urban centres.

"The food delivery sector is still in its nascent stages in the country and ... more competition will only foster innovation and growth which will benefit the sector overall," Rakesh Ranjan, Zomato's food delivery CEO, said on Monday, reported Reuters.

Swiggy went public in November, more than three years after Zomato made its market debut, securing a valuation of $12.1 billion. In the competitive food delivery space, Zomato holds a 58 per cent market share, while Swiggy trails at 34 per cent.

Zomato's food delivery segment contributes approximately 58 per cent to its total revenue. The company reported a gross order value (GOV)—which includes food prices, platform fees, and delivery charges—of Rs 32,224 crore ($3.82 billion) for the last fiscal year. This reflects a consistent average annual growth of 30 per cent over the past four years.

Ranjan expects the company to sustain this growth rate over the next four to five years, "if not longer," driven in part by expanding its restaurant partnerships.

As of March, Zomato had approximately 247,000 active restaurant partners on its platform each month, an 18 per cent increase from the previous year.

The company has also introduced several new features, including scheduled deliveries, the option to purchase cancelled orders at discounted prices, and a dedicated fleet for large orders catering to events with up to 50 people.

However, Zomato is grappling with "phenomenally high" attrition rates among its delivery drivers. To address this challenge, the company is offering additional benefits and greater flexibility to attract and retain more gig workers.