Zomato looks forward to small cities in India for its growth

Zomato reported that tier III and tier IV cities contribute 50 per cent of its monthly order volume by March 2020 from the present 35% as it expands presence in the country.  The company is presently in 556 cities and towns in India. "Most of Zomato's cities and towns beyond the top 15 markets run profitably, and contribute to more than a third of our revenue. These cities currently contribute 35 per cent to our monthly order volume which will increase to 50 per cent by the time we expand to more than 700 cities (March 2020)," said Zomato Co-Founder & CEO Deepinder Goyal. 

Launches in the smaller cities have reached an initial 1000 orders-a-day within a few weeks. While the average order value is lower by 20% in the non-metro cities. "By all measures, our delivery business economics in non-metro cities is superior to metro cities," Goyal said. Zomato knows well that the delivery business is a big game in India and its growth in the smaller cities can be high after a while. Zomato plans to remain committed to cloud kitchens. As of now, they don't plan to compete with their restaurant partners. 

As for the future, they ate expecting that around 200 million people in India will order food from Zomato about five times a month with the top 20 million ordering once a day. "These 200 million people (and in some time, many more than that) are the real India. And that India is coming of age... However, India is a market which is unique – here, companies that innovate and adapt will earn the right to serve the millions of India” Goyal said.