COVID-19 Destroys Food Business: Swiggy, Zomato Loses 70% Orders, 80% Restaurants Closed

According to the investors, companies and restaurants, online food delivery orders for Zomato and Swiggy have dropped 70% in the last 10 days to under 1 million a day, as customers step back and top restaurants shut shop in the wake of a nation-wide lockdown to curb Covid-19 virus outbreak.

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Food Delivery Apps See a Major Dip in Orders!

An investor in the food delivery industry said, “From a steady state of 2.5 million deliveries a day, today we are at sub 1 million orders which are marginally inching up.”

According to RedSeer Consulting in the first two weeks of March, which was before the lockdown, food delivery orders declined 20%. The firm has forecast a further drop in future, without specifying the actual number.

The main food delivery apps struggled in the first few days of the lockdown as the delivery staff allegedly were harassed by police. Swiggy said about 60-70% of its cities are still shut for food delivery including few prominent ones like Vizag, Vadodara, Guwahati, Indore. However, the businesses now also face other challenges like winning back customer trust about food hygiene and bringing back more restaurants to their platforms.

Anurag Katriar, president of the National Restaurant Association of India (NRAI) said, “Not more than 20% restaurants must be live during this time… and with very few operating …the volumes for live ones is around 40% that of normal volume.” Last month prior to the lockdown, the NRAI representing over 500,000 eateries across India, had asked its members to close businesses. Katriar, who runs deGustibus Hospitality and multiple delivery brands including Neel ki Biryani, Indigo Burger Project and Indigo Deli, has also shut his businesses.

How are the Food Delivery Apps Coping with the Loss in Business?

Dominos, which has been operational during the lockdown, is using section of its infrastructure to deliver grocery essentials. This has led to an increase in the utilization of its delivery boys and get on-ground curfew passes for operations. However, most other top brands are shut.

Both Swiggy and Zomato have expressed a keen interest in delivering grocery and essential items as a service. As a fact, Zomato has  partnered with the Punjab government to deliver essentials and has also struck a partnership with Grofers to deliver from kirana stores.

The food delivery space has taken a massive hit, as it touched  3.2- 3.5 million deliveries in October and since then has slowed down and now taken a whooping dip. The hurt factors include rationalising of discounts and the sale of UberEats India to Zomato. In January, delivery volumes fell by about 7% after UberEats – which was doing about 470,000 orders a day – was sold to Zomato and stopped its independent operations. However, both platforms were able to maintain a 1-2% growth rate till pandemic led to the nation-wide lockdown.