Zomato has a secret growth engine

The Covid-19 induced lockdown roiled Zomato’s delivery and dine out business, but it found succour in a business that it had acquired in 2018.About two years ago to diversify and operate deeper in the value chain, Zomato acquired a business-to-business grocery vertical named Hyperpure and the company’s Co-founder, Gaurav Gupta says this vertical has bucked the trend by registering impressive growth during the last few months.Hyperpure is the online food major’s raw material supplies platform for restaurants. The company’s two other traditional offerings include online food delivery and facilitating dining out - segments were severely affected by the nationwide lockdown.“As fallout of the Covid triggered lockdown, one business vertical which saw no impact is our Hyperpure business. As supply chains got fragmented because of the nationwide lockdown, our organised supply chain was one of the few ones that could deliver key raw material supplies to restaurants,” claimed Gupta, at the recently held TiE-Delhi NCR’s, India Internet Day 2020 event.According to Gupta, as soon as the Government announced the lockdown, two of its key businesses saw a big hit. With people avoiding food made outside of their homes, the company’s food delivery orders nosedived substantially. Similar was the case with the dining out vertical that also took a severe blow as people avoided stepping out of homes.However, Gupta adds, even in those challenging times, when it turned difficult for restaurants to buy supplies, the food aggregator boasted of a robust supply chain that enabled an uninterrupted supply of key raw material and quality ingredients to lockdown hit restaurants.Explaining why the Hyperpure model clicked with its target audience, Gupta said, “These days, many people eat home-cooked food compared to restaurant food because they want to make sure that the food they are consuming is safe and hygienic. For a standalone, single mom and pop restaurant the advantage we bring is that we get them fresh, better-quality raw material at the same price they are used to paying, and get them delivered within 24 hours. So, we now buy directly from farms, poultry farms and farmers and supply to different restaurants.”Elaborating on yet another win-win for restaurants enabled via Hyperpure, Gupta added that for most of the restaurants that buy from the platform, the food aggregator discloses to customers on its platform that these select restaurants use Hyperpure. “So, we can assure them it's the best raw material that they use, and the food is safe and hygienic. So, by leveraging the strength of Zomato platform, we try to do this as a flywheel between customers and restaurants,” he said, adding Covid hasn’t affected the model even slightly. This is clear from the fact that the firm has now extended Hyperpure model to two more cities (Mumbai and Pune) in the last three months. Before this, the service was present only in Bengaluru and Delhi.Launched in July 2008 by two IIT Delhi graduates, Deepinder Goyal, and Pankaj Chaddah, the Gurugram-based food aggregator, is present in 24 countries and 10,000 plus cities globally. The brand that claims to have 100 million plus active users on its platform earned the status of a unicorn in 2018. 77734429Calling Covid an ‘eye-opener’ for the global food delivery company, Gupta underlined that the one virtue helping it is that it completes the food ecosystem for users, in both scenarios, ordering in or dining out. “We launched three new products in this period, and so for us, the business continues,” he maintained.India's food-tech industry is to grow at 25% CAGR to reach $8 billion by 2022-end, forecasts a Google-BCG report. The digital transformation of India’s food tech space has lately been hastened by Covid-induced pressures. The industry maintains digitising the supply chain is the need of the hour to bring in much needed efficiencies. “Deploying technology will assist in demand forecasting, which will further help reduce wastage of perishable items and also facilitate in reducing the number of intermediaries, providing more income into farmers hands,” said Ankur Pahwa, Partner and National Leader, E-commerce and Consumer Internet, EY India.Illustrating the rationale behind the supplies platform, leveraging which the firm looks to be eyeing the multi-dollar opportunity in the farm-to-fork business space, Gupta reasoned, “In any business, the amount of value that you can add to each part of the ecosystem is important. The more you can do that, the more trust you can build for the brand - and that ultimately reflects in the brand's growth. In our case, the focus is on food - whether it’s about restaurants that want diners to come in, or want to source raw materials, Zomato is the platform they can use.”India ranks second in agricultural production globally, yet for the formalisation of its rapidly growing farm-to-fork business space, the sector still has a long way to go. Of late, backed by innovative technology, the segment has seen many food tech majors foraying into this untapped yet fragmented space.“Farm-to-fork startup space is still in its nascent stage and has a lot of ground to cover, especially considering the landmass and number of farmers that need to be covered. This unorganised sector will gain with tech enablement and will help provide necessary inputs, which in-turn will assist farmers to increase their income, along with helping retailers and wholesalers match demand-supply, ensuring seamless linkages between the ecosystem players,” added Pahwa.

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