Zomato looks to venture into catering business to expand market share

As part of a broader strategy to service large orders, food delivery major Zomato aims to venture into the catering business by employing its existing network of restaurant partners, according to a report by The Economic Times (ET).

Rakesh Ranjan, chief executive for food delivery, was quoted as saying that despite concerns about the potential impact on profitability, Zomato is also looking to add more offerings to its loyalty programme, Gold.

Ranjan said that at the current moment, food delivery does not lend itself well to situations where one wants to have a gathering of 20 people at home. There are tons of use cases in the offline world where food delivery does not lend itself suitably. Zomato will be focusing on some of these loose threads.

The company launched a multi-cart option in June which helps users to order from several restaurants at the same time. This fits into Zomato's broader plan to launch more use cases for food delivery to control a broader market share.

By setting up operational changes and initiating marketing campaigns, Ranjan said the company is aiming to build “occasions” for customers to order more. He added that Zomato will aim to address a large base of occasional orderers and low-frequency orderers, by making them associate celebrations and joyous occasions with Zomato and food delivery. That is the vector that the company will be working on.

On December 8, Business Standard reported that SoftBank’s investment firm SVF Growth Singapore offloaded its remaining 93.57 million shares (1.07 per cent equity) in Zomatop. It sold shares at Rs 120.5 apiece to mop up Rs 1,128 crore. Societe Generale, Edelweiss Mutual Fund, Morgan Stanley, and Invesco MF were among the buyers.

After the latest transaction, Softbank's shareholding has declined to 1.09 per cent from a 2.17 per cent stake in Zomato.