Zomato growth takes a knock, Deepinder Goyal blames quick commerce for shrinking food delivery pie

Deepinder Goyal, co-founder and Group CEO, Zomato (now Eternal)

An increasing number of people ordering packaged food from quick commerce platforms such as Zepto Cafe, Swiggy Snacc and Blinkit Bistro has resulted in reduced demand for Zomato’s food delivery services, the company’s chief Deepinder Goyal has said.

“…growth does remain below our expectations for now. Competition from quick delivery of packaged food from quick commerce (is) leading to (a) drop in (the) demand for food delivery from restaurants,” Goyal said on May 1 while announcing the food and grocery delivery  company’s results.

A sluggish environment where consumers are cutting back on discretionary spends and a shortage of delivery partners, largely because they’re shifting to quick commerce portals, also impacted growth, Goyal said.

Eternal (formerly Zomato) had a tough Q4.

Its gross order value (GOV) came in at Rs 9,778 crore, down a percent from the previous quarter and 16 percent higher from year-ago period, well below the company’s guidance of 20 percent growth.

Growth was also hit as Zomato delisted around 19,000 restaurants during the three-month period because they were “eroding the trust of consumers”. And there was one less day in Q4FY25 than in the year-ago period, which was a leap year.

Zomato said these two factors shaved off at least 2 percentage points from Q4 growth.

Even after accounting for these, Zomato would have only grown around 18 percent YoY, still short of its estimate of 20 percent.

Lacklustre growth and slowing demand for services likely prompted Goyal to step in and run the food delivery arm, replacing its head Rakesh Ranjan, as Moneycontrol reported recently.