‘Strong signs of recovery’: Zomato report on the food delivery industry

Food delivery platform Zomato on Wednesday released a report stating that the food delivery industry has shown ‘stronger signs of recovery’ since their last report, published on August 19. The overall sector clocked about 85%+ of the pre-COVID GMV (Gross Merchandise Value), which is up from roughly 75%+ last month, indicating steady growth to pre-COVID levels. 

According to the report, the food delivery sector has recovered in large pockets of the country and in some cases has grown beyond pre-COVID levels. Affluent residential areas in the country are leading this growth. 

Some metros, such as Delhi and Mumbai, are nearing full recovery with 95% pre-COVID GMV. Kolkata, Patna, Jamshedpur, Ranchi, and Siliguri are cities which have completely recovered by exceeding pre-COVID levels. Bengaluru, Chennai and Hyderabad are still behind the curve with ~80% of pre-COVID GMV. 

In the Delhi-NCR region, affluent areas like Central and South Delhi bounced back to pre-COVID levels. Some micro localities within Central Delhi are at two times the pre-COVID levels while Connaught Place has also bounced back. In South Delhi, the average order value rose by 65% between February and September, while the area recorded 110% growth. 

Residential areas in Gurugram, such as DLF Phase 1-5 have recovered to one-and-a-half times the pre-COVID levels but commercial areas like Cyber City and Udyog Vihar are heavily affected due to the work-from-home policies. 

Premium restaurants, which have opened up for online delivery, have a lot of takers as spending on them has grown by over 25% when compared to the pre-COVID levels. During festivals like Raksha Bandhan, Janmashtami, Teacher’s Day, and Independence Day, there was a huge spike in online orders. The report said that customers who had not ordered since the first day of the lockdown are 20% more likely to order for the first time during festivals. 

The report also suggested that since people are spending more time with their families, group ordering has gained momentum. While recovery on single-person meal orders, which account for about 60% of all orders before COVID, now lingers at 50-70% level for most regions. Order sizes or items per order have also increased by 20% over pre-COVID levels. Orders with meals for three or more persons have recovered well and are higher than even pre-COVID levels. 

The company also expects a full recovery in both metros and smaller cities due to the ongoing Indian Premier League (IPL) which will be followed by the festival season.