FILE PHOTO: The logo of Indian food delivery company Zomato is seen on its app on a mobile phone displayed in front of its company website in this illustration picture taken July 14, 2021. REUTERS/Florence Lo/Illustration/File Photo
CHENNAI (Reuters) - Indian food delivery major Zomato expects its key meal delivery business to grow at an annual rate of 30% over the next five years, a top executive said, hailing the listing of SoftBank-backed peer Swiggy as a boost for the sector.
Apps delivering everything from grocery to food within minutes have expanded rapidly in the world's most populous country, turbocharged by demand from the affluent and middle class in its large cities.
"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.
Swiggy went public in November — more than three years after Zomato hit the bourses — fetching a valuation of $12.1 billion.
In food delivery, Zomato has 58% of the market, compared with Swiggy's 34% share.
Zomato's food delivery business accounts for about 58% of its topline with the gross order value — encompassing food price, platform fees and delivery charges — at 322.24 billion rupees ($3.82 billion) last fiscal year, marking an average annual growth of 30% over the last four years.
Ranjan expects the company to maintain that pace for the next four to five years, "if not more" as he eyes additional growth from the launch of new restaurants.
As of March, Zomato had roughly 247,000 average monthly active restaurant partners on its app, 18% higher than a year earlier.
Zomato has also been rolling out new features, including scheduled delivery, option to grab canceled orders at discounted prices, and a large order fleet that supplies food for gatherings of up to 50 people.
However, "phenomenally high" attrition among delivery drivers is a challenge for the company, which is offering more benefits and flexibility to onboard more gig workers.
($1 = 84.3490 Indian rupees)
(Reporting by Praveen Paramasivam; Editing by Mrigank Dhaniwala)
