Foodtech segment has been scaling up fast as Zomato, Swiggy, foodpanda and UberEats entered many new cities and dishing out irresistible discounts. Among the aforementioned four, Zomato is claiming 28 million monthly order run rate in December 2018.
It’s a significant 7 million up from October when the Alibaba-backed firm had claimed 21 million monthly order run rate. Order run rate is essentially calculated on the basis of week’s (in some cases day too) volume in a given month that witnesses maximum orders.
Besides spate in order run rate, its subscription services also found more takers. While Zomato Gold has now about 7,00,000 members and 6,000 restaurant partners, number of Piggybank subscribers reached 1.5 million mark as of December 2018.
Meanwhile, Zomato had put a brake on its first ever paid subscription service Treats after running it for over 18 months.
It’s worth noting that Zomato’s rival Swiggy hasn’t given monthly order run rate from several month. However, industry sources outline Swiggy is little ahead of nearest rival as it processes 27-28 million orders every month (absolute orders not monthly run rate).
Over the past couple of months, Zomato has been expanding food ordering service to 100 cities. In comparison, Swiggy is limited to about 60 cities. Together they are burning about $80 million every month. If we include foodpanda and UberEats, the burn rate of four players go up to $100 million.
The burn rate of foodtech majors will go up as as Swiggy is poised to enter micro-delivery (aka milktech) segment while Zomato recently entered farm supplies to restaurant partners in Bengaluru through HyperPure.
On the back of massive funding, competition in foodtech segment is going to intensify this year. Swiggy had recently scooped up $1 billion round while Zomato is negotiating a mega round from Alibaba. After e-commerce and digital payments, foodtech has turned out to be super competitive segment. In 2019, it would be interesting to see how things shape up in foodtech segment.
The development was first reported by ET.