IPL playing key role in recovery of food delivery firms Swiggy, Zomato

India’s total online food delivery gross merchandise value (GMV) is expected to be $13 billion by 2024 by clocking 12 million daily orders on an average, according to a report by RedSeer.
After Zomato’s food delivery volumes touched pre-Covid-19 peaks, Swiggy said that overall, the food delivery business has recovered about 80-85 per cent of the pre-Covid order values. The recovery is taking place after multiple rounds of unlocks, as restaurants open up for business.

Over 100 million orders have been placed on the Swiggy app for food, groceries, medicines and other household items since the lockdown. Almost over 200 cities have reached 90 per cent of their pre-Covid GMV (gross merchandise value) levels with more than 70 cities seeing a full recovery. 

“In fact, they have seen double-digit growth over the past 4-5 weeks, especially when the lockdown opened and when consumer's fears of Covid-19 subsided,” said Swiggy. “Certain micro pockets within the country have also reached 200 per cent of their pre-Covid levels,” it added.
Zomato Founder and CEO Deepinder Goyal said that a number of cities (India food delivery volumes) are now at over 120 per cent of pre-Covid peaks. “Food delivery is one of the safest recreational options available to our customers during the pandemic. Going forward, we anticipate the food delivery sector to continue to grow at about 15-25 per cent m-o-m (month-over-month) for the foreseeable future,” said Goyal in a tweet.

He said since the end of March, Gurugram-based Zomato had delivered a total of 92 million orders – and there have been zero reported cases of  Covid transmission through food delivery or food delivery agents.

He said that a few weeks ago, the WHO (World Health Organization) had categorically stated that people should not fear food or its packaging, processing or delivery.

Rohan Agarwal, director at research firm RedSeer Consulting, said the Indian Premier League (IPL) and its promotion in the form of campaigns and engagements had strengthened food volumes.

“IPL has played a key role, Due to IPL event food delivery volumes are seeing a jump and foodtech companies are capitalising on that demand,” said Agarwal. “IPL is like a festive season for food delivery platforms. During IPL, consumers come together to watch the matches. Snacking together is one of the associated behaviours,”  he said. 

Given the absence of live sporting action on account of the Covid-19 pandemic, analysts have said that consolidated viewership across TV and digital could cross 700 million this year for IPL. This stood at over 600 million last year.

RedSeer's Agarwal said over the last few months, food delivery business has started to recover slowly as the perception related to the fear of catching the virus due to food delivery is reducing and consumers have also started to spend discretionary expenses on ordering food. 

Analysts said that Covid-19 pandemic created uncertainty around income, job security and safety due to which people had stopped ordering or dining outside. Also, factors such as work from home and a lot of people moving back to their hometowns were responsible for the drop in the corporate orders for these food delivery firms to deliver meals at various offices. “Though food delivery is recovering slowly, corporate order volumes would take some time to bounce back,” said Agarwal of RedSeer.

Also, some analysts said dormant customers are most likely to order from food delivery firms during the upcoming festive season resulting in order spikes.

India’s total online food delivery gross merchandise value (GMV) is expected to be $13 billion by 2024 by clocking 12 million daily orders on an average, according to a report by RedSeer.

While food delivery will continue to be the core, RedSeer anticipates significant growth in the other businesses such as ads and groceries, amongst others. These businesses have the potential to contribute up to a quarter of the total GMV.

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