According to Zomato CFO Akshant Goyal, there has been an industry-wide slowdown in the food delivery business since late October (post-Diwali) and the trend is seen across the country, but more so in the top eight cities.
“As a result, GOV (gross order value) growth in food delivery in Q3FY23 was only 0.7% (QoQ) in an otherwise seasonally strong quarter,” he said.
“It remains a challenging demand environment, but we are seeing green shoots of demand coming back in the recent weeks, which make us believe that the worst may be behind us,” the CFO said.
Also read: Zomato Q3 Results: Loss widens to Rs 347 crore, but sales rise 75% YoY
Zomato chief executive Deepinder Goyal echoed his CFO but stressed the current slowdown in the food delivery business is temporary in nature and the long-term opportunity remains “large and exciting”.
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He said macro slowdown for the mid-market segment, boom in dining out for the premium-end as well in travel at the premium-end are some of the factors causing the slowdown. Recently, Swiggy CEO Sriharsha Majety had told staff in a note that the firm witnessed a slowdown in its core food delivery business.
Responding to a query on Zomato Gold, the CEO said that in less than a month the Zomato Gold programme has over 900,000 members. Earlier this month, Zomato relaunched the Gold subscription programme.
“In CY22, customers who ordered over 50 times a year grew by 50% YoY to 2.7 million as compared to 1.8 million in CY21. The number of customers ordering more than 100 times a year (2 orders every week) increased by 70% YoY,” he said.
The relaunch of Zomato Gold won’t impact the company profitability timelines as it was already ‘baked in’ in its previous estimates as the firm has been working on the product for a while, he noted
Top-level exits
On top level exits, CEO Goyal said building a company is not just about the journey of the business but also about people’s personal journeys. “Both these journeys take their own twists and turns. And sometimes, for some people, the distance between their form (their mindset and skill set) and the company’s context becomes such that it is necessary to take a break from each other,” he said
However, he ruled out filling senior positions like chief technology officer and head of food delivery through external hires.
“…we don’t have the need to fill these two spots; being in ‘continuous lookout for great talent’ is an attack tactic, not a defence tactic,” he added.
Zomato has seen exit of senior level over the past few months, including cofounders Mohit Gupta and Gunjan Patidar–who was the head of technology.
Senior executives Rahul Ganjoo and Siddharth Jhawar also quit Zomato.
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