Zomato revives Xtreme: Hyperlocal delivery service returns in new avatar
Prominent food delivery giant Zomato is gearing up to bring back its hyperlocal logistics service, Zomato Xtreme. The service was put on hold in July, but now, it is all set to make a comeback - with some changes. Zomato Xtreme, you may recall, used the rider fleet of Zomato's food delivery platform and served both small and big businesses for intracity deliveries of packages weighing up to 10kg.
Zomato Xtreme's initial operations and collaborations
Zomato Xtreme was launched in October 2023, and its services were pretty much similar to those offered by Shadowfax (backed by Flipkart) and Porter (funded by Tiger Global). The platform had even partnered with e-pharmacy platform Tata 1mg for last-mile deliveries. However, now, the focus of Xtreme is being recalibrated to concentrate more on Zomato's core strength - food delivery.
Zomato's delivery partners and new business model
As per Zomato's annual report, the company had over 400,000 active monthly delivery partners in its food delivery operation. Its quick commerce unit, Blinkit, also operates with a dedicated fleet of riders. The business model for the revamped offering is still in the works but is likely to follow Zomato's existing distance-based fee mechanism.
Zomato's food delivery experiments and future plans
Zomato has been quite innovative with its food delivery service, launching features such as intercity delivery service Zomato Legends and even testing 10-minute food delivery in Gurugram. However, Zomato Legends was shut down in August this year. Even with the growth of quick commerce, food delivery continues to be Zomato's biggest business, contributing nearly 60% of its gross order value (GOV) across all B2C verticals. In the June quarter, Zomato's food delivery business alone generated ₹9,264 crore in GOV.
CEO's views on food delivery and future app plans
Speaking at The Economic Times Start-up Awards earlier this month, Zomato's founder and CEO Deepinder Goyal said the food delivery use case deserved a separate app. He noted that in food delivery, the moat for any company is the number of riders it has available on the ground. Zomato is also looking to move its dining out offering to an upcoming app called District, which will house all of Zomato's going-out businesses like dining out, entertainment, and live ticketing.
