Tier II Cities Turn Into New Selling Points For Zomato, Swiggy

SUMMARY

1 in every 5 Zomato customers, who were living in metro cities pre-Covid, are now opening the apps from smaller towns

For Swiggy, some Tier II cities are also performing at 150% of pre-Covid levels

Zomato has served nearly 92 Mn orders since lockdown, while Swiggy has served 100 Mn

Tier II regions have turned out to be the new selling points for food delivery platforms and restaurant aggregators Zomato and Swiggy. They have attributed this spike to those who have migrated back to their hometowns during the pandemic.

Zomato has highlighted that nearly 1 in every 5 customers, who were living in metro cities pre-Covid, are now opening the apps from smaller towns recently. Of the relocated populations, a third has resumed ordering from their new locations. This has resulted in Patna, Jamshedpur, Ranchi and Siliguri outperforming their pre-Covid levels.

Swiggy too has noticed a similar trend with smaller cities like Kolkata, Kochi, Lucknow, Visakhapatnam, Guwahati and Mysore doubling up their volumes and gross merchandise value (GMV). Some Tier-II cities are also performing at 150% of pre-Covid levels. At the same time, metro cities like Bengaluru and Chennai are only 80% of pre-Covid GMV levels, the company told Mint.

After a slump of nearly 3-4 months, both Zomato and Swiggy are also on the road to order recovery with the ongoing festive and Indian Premier League (IPL) season. Both the companies are running aggressive match-discount offers to lure more customers into making high ticket value orders.

Swiggy told the publication that during the ongoing cricketing season, Tier II, III cities have performed exceptionally well recording double-digit growth. Ahmedabad, Jaipur and Lucknow are the most active Tier II cities for the firm. Meanwhile, Zomato too notices a similar pattern, highlighting that dinner mealtime has been witnessing 1.5x growth in terms of orders as compared to other mealtimes.

Earlier this month, Zomato’s founder Deepinder Goyal highlighted that food delivery volumes have reached pre-Covid levels for the Gurugram-based company. It has delivered over 92 Mn orders since lockdown and expects the sector to grow 15% month-on-month.

According to Zomato’s report, average order value has increased by 65% from February till September this year in South Delhi, and the food delivery business is at 110% of pre-Covid levels. In Gurugram, residential neighbourhoods DLF Phase 1 and 5 are at 150% of pre-Covid levels.

Meanwhile, Swiggy has recovered almost 85% as it delivered over 100 Mn orders since the lockdown. The company has also onboarded 7000 new restaurants on a monthly basis.