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Zomato to launch 10-minute food delivery in Gurugram next month. Is it good strategy?

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Zomato to launch 10-minute food delivery in Gurugram next month. Is it good strategy?

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Zomato co-founder Deepinder Goyal, said, "After becoming a frequent customer of Blinkit (one of Zomato’s investments in the quick commerce space), I started feeling that the 30-minute average delivery time by Zomato is too slow, and will soon have to become obsolete."

Zomato to launch 10-minute food delivery in Gurugram next month. Is it good strategy?
Starting with Gurugram next month, online food delivery platform Zomato on Monday said it will deliver food in record 10 minutes.
Zomato co-founder Deepinder Goyal, said, "After becoming a frequent customer of Blinkit (one of Zomato’s investments in the quick commerce space), I started feeling that the 30-minute average delivery time by Zomato is too slow, and will soon have to become obsolete."
Called Zomato Instant, Goyal in a blog post said, nobody in the world has so far delivered hot and fresh food in under 10 minutes at scale, and the company is eager to be the first to create this category, globally.
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During listing, brokerages were betting on Zomato's grocery delivery prospects. But in September 2021, Zomato surprised the street by shutting their own grocery business and investing in Grofers (August 2021).
Thereafter, Zomato shut Grofers full-time delivery businesses to focus purely on Q-commerce and 10-minute delivery - rebranding it Blinkit in December 2021.
Unable to scale BlinkIt at the expected pace, Zomato announced a loan of $150 million at 12 percent interest to BlinkIt in March at the same time when reports of a merger between the two are doing rounds.
Now, what's confounding the street is, if and when they merge the two - then they’ll essentially be at the same place where they started (own grocery operations and food delivery) - but with just 10-minute grocery and food delivery as an option and a lot of investors dollars burnt.
This, even at the time when their operating losses have expanded, average order values have declined and the cost of incremental business has increased. Not to mention, the stock has fallen 52 percent from its peak and is hovering just above its issue price of Rs 76.
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