Small restaurants, cloud kitchens heating up competition: Zomato's Rakesh Ranjan

livemint.com:

Zomato has now chalked up two successive profitable quarters, focusing on improving efficiency as it handles more orders and a wider network of restaurants. The online food-ordering platform still has a number of challenges on its plate – getting restaurants to agree with its policies, driving up customer acquisition in a country that still loves to cook at home, and ensuring the overall well-being of its delivery riders. At the company headquarters in Gurugram, Rakesh Ranjan, CEO, Food Delivery, Zomato, spoke at length on the evolving restaurant landscape, inflation, the company’s plans to get more customers to order more frequently, and on chasing profitability.

Edited excerpts: There are a few things that have happened right. One is that our internal efficiency has improved significantly. For example, because now we are doing more orders than what we were doing a few quarters ago, we are operating with a dense network of delivery partners and a more dense network of restaurants.

When the density of orders increases, you run shorter distances, delivery times reduce, (and) delivery partners are able to do more orders in the same amount of time, and that improves the overall efficiency of the system. But for that to happen, our systems need to be really good. What really impacts the cost economics is whether we find the best possible rider for a particular order in the shortest possible amount of time.

Just looking at the overall addressable market, everyone has to have food – whether they cook at home, go out, or get food delivered. We do know a large part of our country will continue to cook food at home. And that means that they will be ordering or buying groceries — so that remains a larger set of the market.