Daybreak - The hunger games are raging but Zomato just won't take the bait

Episode Date: May 6, 2025

Four months ago, food delivery giant Zomato decided to run an experiment. If you are a regular patron of the app, you may have noticed a tab called ‘Quick’ appear, that promised 15-minute deliveries in a bunch of metropolitan cities like Bangalore, Mumbai and Delhi NCR. Now, the company’s founder and CEO made an interesting statement last year that explains why it would choose to try out this experiment. He was asked a question about how quick commerce has changed customer expectations around food delivery. And he said, quite simply – “Blinkit is fast, but that has made Zomato seem slow.” He has a point. You may recall that Zomato subsidiary Blinkit launched its in-house 10-minute snack delivery service called Bistro last year, just one day after the very popular Zepto cafe was launched. Swiggy Instamart meanwhile, launched a similar service called Snacc. In many ways, 2024 was the year 10-minute food delivery became the next frontier of quick commerce.Naturally, the biggest food delivery giants in the country did not want to be left behind. So while Zomato launched Quick, Swiggy rolled out its own ultra-fast delivery service, Bolt. But here’s where things get interesting. While announcing its Q4 results last week, Zomato announced that its four-month experiment was very quickly coming to an end. In a letter to shareholders, Deepinder Goyal explained that they just could not see a path to profitability without compromising on customer experience.The Ken's COO and the host of Two by Two Praveen Gopal Krishnan explains what changed. Daybreak is produced from the newsroom of The Ken, India’s first subscriber-only business news platform. Subscribe for more exclusive, deeply-reported, and analytical business stories.

Hi, this is Rohan Dharma Kumar. If you've heard any of the Ken's podcasts, you've probably heard me, my interruptions, my analogies, and my contrarian takes on most topics. And you might rightly be wondering why am I interrupting this episode too. It's for a special announcement. For the last few months, I and Sita Raman Ganeshan, my colleague and the Ken's deputy editor, have been working on an ambitious new podcast. It's called Intermission.

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Four months ago, the food delivery giant Zomato decided to run an experiment. If you are a regular patron of the app, you may have noticed a tab called Quick Appear that promised 15-minute deliveries in a bunch of metropolitan cities like Bangalore, Mumbai and Delhi-NCR. Now, the company's founder and CEO, Dipinder Guell, made an interesting statement last year that explains why it would choose to try out this particular experiment. He was asked a question about how quick commerce has changed customer expectations around food delivery.

And he said quite simply, Blinket is fast, but that has made Zomato seem slow. And he has a point. You may remember that Zomato subsidiary Blinket launched its in-house 10-minute snack delivery service called Bistro last year. just one day after the very popular Zepto Cafe was launched. Swiggy Instamot, meanwhile, launched a similar service called Snack. In many ways, 2024 was the year 10-minute food delivery became the next frontier of quick commerce. And naturally, the biggest food delivery giants of the country did not want to be left behind. So while Zomato launched quick, Swiggy rolled out its own ultra-fast delivery service called Bolt.

But here's where things are. get really interesting. While announcing its Q4 results just last week, Zomato announced that its four-month experiment was very quickly coming to an end. In a letter to shareholders, Dipender explained that they just could not see a path to profitability without compromising on customer experience. And he said that it was because they realized that the current restaurant and kitchen infrastructure just cannot support 10-minute deliveries. But also, they did not see an increase in demand for the service either. Which is interesting considering Swiggy has been going all out with Bolt. It's expanded the service to more than 500 cities, including tier 2 and 3 cities as well. Same promise, same logistical

nightmare, but different results. So in this episode, we will unpack what is going on. Hello and welcome to daybreak. I'm Snigda. And I'm Rahil and for a change today we are chasing the new cycle. We will tell you. everything you need to know about Zomato shutting down its quick food delivery service after just four months. Hello, we're joined by Praveen Gopal Krishna today. He is the chief operating officer of the Ken, the author of one of our most popular newsletters, The NutGraf, which is now also a podcast. We will plug that later. PGK also hosts our other premium podcast 2.2.

PGK have one thing to say to you. Leave something for the rest of us to do. No, never. My life is going to be to take over every single single. podcast that the Ken does. PGK is the solo preeneer that Sam Haltman has been warning us about. Min is the AI.

I'll just say that I was not at all a podcaster six months ago and I'm surprised that I'm here right now. I'm really, really happy I'm on this podcast because I think this is the second time. Second episode. Yeah. We're back on daybreak. Okay. Yeah. How is it going? It's going well.

We have very exciting episode today. The other hat that you wear in the newsroom is that of our in-house, quick, commerce expert, which you will be dawning yet again for this episode. You know, PGK has been tracking the space since it blew up a couple years ago. And today, he's joining us to talk about ultra-fast food delivery and why Zomato probably realized that it just wasn't going to work for it in the long run. With that, let's get into the first question.

Stigda, would you like to take it away? Yeah, sure. PGK, let's start with like a very basic question, right? So snack, which was Swiggies and Bistro, which is Blinkets, Zomato's. You know, we know that they were extensions of their 10-minute grocery delivery business, right? They already existed. And it was basically in response to Zepto Cafe. But then, you know, Swiggy and Zomato didn't stop there.

They also decided to, you know, bring in 10-minute deliveries through their food delivery apps. Like what we want to understand is like, why would they want to do that when snack and bistro already. existed. Yeah. So, I mean, there's a very long answer to this, okay? But I'll tell you what it is. I think the first one-line answer to this is that you have to understand that Zomato and Swiggy are not one company each.

I mean, I know the two companies, but they are actually four companies, right? And I don't mean that they are four companies as they have Blinket and Instamard. I mean that they literally are, I don't know what that is. Is it schizophrenic where you basically have like two hats? to wear. And it is that because I'll tell you the two kinds of companies they are. On one hand, Zomato and Swiggy are food delivery companies. And they are food delivery pioneers. They fought out a bunch of companies and you guys probably don't remember this, but there were so many companies through the 2010s that tried to do food delivery. Everybody got killed. And finally, out of the wreckage

emerges Zomato and Swiggy who basically have like practically a doopoly, crack the entire food delivery market, deliver anything to you within like 30 to 40 minutes. In fact, I think Zomato is also doing this thing where they tried delivering things to you from like other cities and all. Into city. Yeah. At one hand, they are two successful food delivery companies and they are incumbents. On another hand, they are two also successful challenges of 10 minute delivery of products

like groceries, electronics, appliances, beauty products, PS4s, printouts, anything and everything. So in another lens, they are challenges because that 10-minute companies that they have started, which in this case is Blinket and Instamart, are challenging and disrupting existing structures of e-commerce companies like, say, Flipkart and Amazon. One could argue even Kirana stores. So I think this duality is very important. This duality of on one hand, you're a company that is an incumbent, but you're also a company that's a challenger.

That is where, that is the heart of it. And we have to understand and appreciate that before we get into anything else. Got it. Yeah. But there's an interesting kind of contradiction here, right, that we should kind of unpack. Again, like the 10 minute space is largely fueled by FOMO, which you have written about previously in the NatGraph as well. And when we're talking about 10 minute food delivery, sure, Zomato and Swiggy have kind of experimented with that in the past, never worked.

But then Zepto Cafe went ahead and said, hey, you know what? We are going to do this. And then you saw like FOMO kind of spark this attempt by, you know, Swiggy and Zomato to try it out on the quick commerce side of things. We saw that play out then later on in the food delivery side of things as well. And now, you know, when you're talking about these mammoth

businesses that are doing multiple things, the lines start to blur almost. Yeah. Where they're kind of stepping on their own toes. Yeah. Like, how does that contradiction kind of play out, PGK? Because frankly, it's confusing. No, it is confusing.

But I'll explain. But it actually makes logical sense if you really think about it. Just see it through the lens of you have, these are not one company, but two companies each. One company is an incumbent. When you're an incumbent, what are you? You have one. You are sitting. You're resting on your laurels.

You're probably making money. I mean, neither of them are profitable, but they are businesses, food delivery businesses. are close to being profitable on certain metrics if you decide. They're also, they've also captured most of the market. In fact, if you go back and look at, say, Zomato especially, if you go back and look at their last few quarters, one thing that's stark and apparent is that their market for food delivery has flatlined if not declined.

So, which means that they have practically every single person, Rahil, in this country who has to order food through an app, is ordering food through an app via Zomato and Zvigui. So on one hand, you have these two companies who are incumbents. And incumbents are not as restless, but they're paranoid. On the other hand, you have these two companies, which is Blinket and Instamart, who are insurgents. And insurgents are deadly. They're like assassins.

They try to like attack. They look and hunt for weak spots where, you know, there is some flesh and there is some belly and there is some weak spots. And you try to attack it and try to break it. Right. So that's the way to think about it. Now, Zepto, it's interesting you said about Zepto. Zepto is not an incumbent. Zepto is the only company

out of this 10-minute companies that's completely a challenger. It's an insurgent. So think of it from Zepto's standpoint. So if Zepto is a 10-minute company and it starts delivering 10-minute products, so I think the last episode we did last year was on 10-minute quick commerce.

It was when people started going crazy with 10-minute delivery. And we spoke about why people stick to apps and leave apps, etc. And if you remember, we spoke about categories. Do you remember that conversation? Yes, of course, yeah. What did we discuss?

And the relationship analogy that you made that was three. Yeah. We spoke about categories. Do you remember the categories stuff where we said that, oh, they started off by doing some groceries? And then after that they said, well, groceries is fine. But you know what would be cooler if we could also get into things like, say, apparel? Yeah. Or it would be cooler if you could get things into like, say, electronics.

What would be cooler if we could get things into like, say, fresh vegetables? So there was this entire category expansion that was happening in 10 minute delivery. And one could argue, if you look at it. at it just category to category, and you have to tell me if this is true. Is there something that Flipcard and Amazon deliver that a blanket does not today? I'm just talking about categories. Forget about specific products. Really think about it.

Is there anything? Struggling, maybe larger electronics, but before you know it, they're going to get back. No, not even that. They're selling ACs as well. Yeah. Yeah. I'm looking at washing machine, refrigerator kind of thing. But before you know it, it seems very plausible that that's going to happen.

Exactly. Or if you stopped someone in the street. and said, hey, do you know that blanket sells a refrigerator? Nobody's going to be surprised. It's going to be, yeah, absolutely. So my point is that in some ways, if you think about it, a blanket and an instabart have become horizontal, let's become like the horizontal quick commerce companies. You can get any category that you want within, say, well, maybe not 10, maybe 20 minutes, right?

So they've become that. Now, if you've become that, there is this thing that I wrote. I think I wrote this in an edition of the NutGraph a few months back, maybe back in December, I said that the quick commerce monster essentially demands to be fed. Like once you go down this route of saying that I'm going to deliver stuff in 10 minutes,

you just have to keep adding categories. There is nothing that you can do. And now those categories, I argued, has to expand into things like, say, the two big ones that are left, which is pharmaceuticals, medicines, and alcohol. Alcohol. Right? if I bet all of these companies, in fact, they are already trying,

they are trying to crack both of these categories. Because once you do that, I mean, it's not game over, but the monster demands to be fed. You need to create more and more categories for people to really change their behavior and adopt it. So now if you think that this is happening, here's my next question. You know, there is one category on this side, which you can expand to, because I said the quick commerce, Quick commerce monster needs to be fed. And that category is food. Think of it from Zepto standpoint.

Zepto can look at this and say, well, we have added all of these categories from electronics to beauty and this thing and all. Why don't we add food? Who says we don't need food in 10 minutes? And that's what they did. So that's how Zepto cafe happened, where they said, well, maybe we need food in 10 minutes

and they launched it. I think what they initially started off with was they kept it within the original Zepto app itself. I suspect they found out later that this behavior is a little different and that's why you can't keep it in the same app you have to have a separate app so they spun out Zepto Cafe

and well I mean Zepto is a private company so private companies can say whatever they want about numbers but still I think there is some consensus that Zepto Cafe is doing well and it is posing some kind of a challenge now go back to Swiggy and Zomato Swiggy and Zomato the paranoid incumbent side

is looking at Zepto Cafe and saying damn these guys are coming for us just like how an Amazon and Flipcard is looking at Blinket and Instamart and saying, damn, these guys are coming for us. And now they have to respond. Now put yourself in the shoes of Zomato and Swiggy. If you have to respond, how would you respond? By doing it myself.

Right? So it's like why FlipCard started FlipCart Minutes. FlipCard said, oh, we need to basically do something with quick commas. What can we do? Well, let's start this new thing called quick flip-cutt minutes where people can get some flip-card products within like 10 minutes. That's one way to do it. So now, Zomato and Swiggy want to do that.

They clearly say, well, we need to do food in 10 minutes. Now, if you think about Zomato and Swigi, there are two ways again to do that. One way to do that is, unlike Flipkart, Zomato and Swigi have restaurant partners. So you have to go back to your restaurant partners and say, hey, we want to do 10 minute delivery. Can you tell me what part of your products can you deliver in 10 minutes?

Maybe you can't deliver, well, I don't know, what is that, a big really, really, intricate meal with like kebabs and you know one shorma and all of those things. But you can do biryani. But you can do biryani. Exactly. Maybe you can do biryani in 10 minutes.

You probably can. I guess some restaurant partners said, sure. I guess we can do that. But I think, I don't know if you know this week. We did an episode on this for two by two. Yep. It was an episode where we. With Thomas Fen.

Yes. Great Malu restaurant founder, Thomas Finn. Yeah. He's a founder of this restaurant called Mahabeli. but for the purpose of the episode, he's the secretary of the NRAI, which is a national restaurant association of India. And I think it's fairly non-controversial to say that the NRAI

has been fairly critical of Swigie and Zobato, saying that they have been like, you know, taking away most of their margins. It's extremely unsustainable. Something needs to be done. This is unfair. Et cetera, et cetera. So he was there along with a couple of other guests

who gave the perspective from restaurants and how, and one of the things that came out in that episode, you'll be surprised how few products, food products can be delivered in 10 minutes because if you're a restaurant you are optimized you have a certain way of working in the kitchen you have a certain way of doing things you have a certain way of like creating dishes

now you can say well you've got to create this dish in like 20 minutes so that my guy can come and pick it up in 20 minutes so that we can go deliver I think restaurants can do that because at some level if you or I or any of us go to a restaurant and we order something 20 minutes seems like a reasonable amount of time for it to be prepared and comes to your table right? So a restaurant can say, sure, we can do that. After that, you pick it up and do whatever you want.

But to say that now you need to prepare it in actually not 10, probably something like two to three minutes. Because the rest of it goes for like packing and delivery, etc. So if you go to a restaurant and say, what can you be ready to give to me in three minutes? I think that becomes a very difficult conversation. It becomes a particularly much more difficult conversation if you're having it at restaurants already don't like you very much.

I don't know if you guys are. have used bolt or I mean actually can I say that it's never exactly 10 minutes it's always more than 10 minutes it might but I think I'm just taking the promise as it is but you're right bolt is actually a little more than 10 minutes so have I tried

so I'll tell you this okay this is just anecdotal but I ended up subscribing to Swiggy Black which gives me I don't know if that's bolt but there are certain products that come very quickly. It's slightly quicker and you get discounts and stuff like that's so I bought it, frankly, I bought it inadvertently. I mean, I was buying something and it came.

I don't think it was a dark pattern, maybe. I missed it, but whatever, I just bought it. I said, okay, now I've bought it. I might as well have it for three months and me, try it out. So my experience has been that I would like to say maybe around 30%. Again, this is anecdotal. 30 to 40% of the time, they seem to miss the delivery window. Yeah.

Right? So I agree with Snigda to the extent that I don't know. I think the delivery timeline is very aggressive. They hate it sometimes, but I've seen them miss it far more than, I mean, than I would have expected. And I don't know if it's just. me, but I find that the kind of offerings, right, like the things on offer on Bolt are very, are catered to

a very specific kind of person, like a college kid that is hungry for some strange reason at like 3 in the morning. And we'll eat fried chicken and like a tub of biryani. I don't think any self-respecting adult is going to fight anything worthwhile on Ziggy Bolt. To be honest, but that's

just my opinion. Yeah, sorry. But you know, Pachie K, on that note, I actually wanted to ask you what do you think are the possible reasons why, you know, most restaurants wouldn't come on board for this 10-minute food delivery. Like, why was it so hard for Svigyan Zamato to convince them to do this? I mean, we discussed this in that episode that we did with two-by-two. And in that, the restaurateurs were like, are you crazy?

There is no way. We don't have the operations. We don't have the back-end. We don't have the machines. We don't have anything to create anything in three minutes for you to be able to pick up in three minutes from the time the order comes. and we're talking about volumes. There's no way we can do it, right? I said, I try to give an example.

I said in that episode, I asked like, okay, hypothetically, what about something like, say, fries? Come on, Rahil, this is the kind of person you're talking about. That is self-respecting a doubt. Yeah, fine. But fries seems like the thing where I was like, okay, maybe fry seems, makes sense. And I remember Gora, who runs Infinity,

who was one of the guests on that podcast, he was like, no, I cannot make fries in three minutes and give it to you, because I have to take it out, I have to fry it, it's going to take at least five minutes, ten minutes inside the oil. It's not going to happen. The only way I can do it is if it's already pre-prepared, but who keeps fries pre-pre-prepared. We know what happens to be prepared fries.

So, I think the universe, Snigda, of products that you can ship from restaurants diminishes considerably. And I guess it comes back to products like you said, right? It probably ends up being, well, biryani and pre-prepared fried chicken and stuff like that. Well, you keep that with you. Sorry, one more question. You know, there are these two very distinct models within the 10-minute food delivery business. Yes, we should talk about that.

Yeah, can we talk about that? One is, of course, partnering with restaurants, but the other is like a Zepto Cafe, right? Yeah. Which is, like you said, working well. Yeah, so essentially what ended up happening was. So as a result of this, I think Zomato and Swiggy probably looked at this. They must have gone to a few restaurants. And Zomato, we know, tried this earlier.

They tried this thing called Zomato instant, right? Exactly. which they shut down, right, at that point in time. And then they said, okay, I guess this is not going to work, but they're still paranoid. And by the way, I have to tell you, the paranoia is not something that is hearsay. So, again, I'm going to quote from the nutgrave, which I wrote. Okay. And this is Dipinder Goel, right?

And he says this. Blinket is fast, but that has made Zomato seem slow. Yeah. In some areas, we take 40 minutes to deliver and 40 minutes is very, very slow. Two varies. Okay. So customer expectation is moving and food delivery will have to change. More restaurants will open up close to customer locations or a 10 minute food format.

Some canteen food kind of format will come up to meet customer expectations. Think samosas, patis, sandwiches, tea, coffee, nimbo panis delivered in 10 minutes. Could be the next frontier that restaurants haven't even attacked yet. This is canteen type food but in organized fashion, it's interesting. So this could be the next big thing and it is canteen food for people who don't do and eat canteen right now. So it would be a whole new market and additional demand being generated.

That could be the next big growth engine for restaurants. So you see what he's saying. He's really pitching into restaurants and saying, do this so that you will get growth. Right. Now, obviously, maybe some restaurants bit. Some restaurants didn't bite. But I think even Zomato instant.

I think he said that the reason it didn't work out was because we didn't have enough restaurant partners who were like involved or could get on board, etc. Yeah, he said the infrastructure didn't exist and they didn't see profitability long term. Correct. Yeah, it was very tepid. So now what Domattoons we decided was like, okay, fine, we need to do this.

And they did this classic thing that a lot of tech bros say, which is wildly misunderstood. But they also, this phrase called before someone disrupts us, let us disrupt ourselves. Okay. Which is, it sounds very catchy, but it's a little harder than that. But whatever. Okay, let's say they did that. So what they did was they said, okay, what if we did exactly what Zepto is doing? Let's own the damn thing.

Let's set up dark stores. We know how to set up dark stores. Let's put our products in there. We know what products are there. It is the same. Because we are running Swiggy and Zomato, we know the kind of products that people are going to buy, the kind of customers that you said.

Let's put them in there. And whenever someone in order comes, somebody has to just, instead of putting it in a blanket bag, then you take it out, put it in a microwave, heat it and give it to you. Which is not very unlike going to a Kittana store. You go to Kina stores,

you'll always see some samosas or some stuff kept over there. And you ask you, that guy, I'll take it, put it to a microwave and give it to you in a paper plate. It's the same thing, except it's coming to you. So that is how... They come to Japanese departmental stores, no, where they have like really nice food actually. Yes, although I must say that I've been to Japan

and that food is like phenomenal. I don't, I wouldn't call these food things that I would want to order. Hey, chicken pups deserve. Deserve some respect. So to answer your questions, NIGDA, let me again read out what I wrote in the Nuttgraph a few months. Because honestly, this is exactly what it is. Okay. And this is the summary and we can go deeper.

Just so we understand what's going on, here's the situation. Zomato, the food delivery app, owns me. Blinket, the 10-minute delivery app, we just launched Bistro, a 10-minute food delivery app. And Zepto spun out Zepto Cafe, their 10-minute food delivery service into a separate app. Lest we forget, Swiggy has a 10-minute food delivery service as well called Bolt, and it lives inside their original app.

And there is a hot new 10-minute food delivery app in town. It's called Swish, and it recently got a chunk of funding. This was before Swiggy launched Snack, SNAC, which is a separate... This is from December, right? PGGGG is from December. Yeah. Yeah. Then Swiggy launched snack,

which is again the same thing. Again, you get a bunch of these things and they kept it separately. So they decided, you know what, screw it. We're going to do the same thing. We're going to create these new, two new apps. And interestingly, we don't want to keep it under Zomato and Swiggy. We are going to keep it under quote unquote blinket and Instamat. Again, this is what my therapist calls classic self-sabotage.

It makes no sense to me. But I think the interesting. Interesting thing. No, why does it not make sense to you? I'll tell you why. Because we spoke about Zomato Instant a little while ago, right? It was launched in 2022. Same promise as, you know, quick, which was an experiment, of course.

Two-kilometer radius, we partner up with restaurants and we get you food in 10 minutes. It crashed and burned the first time around within a couple months in less than a year. One year later, they're doing exactly the same thing and expecting different outcomes somehow. Like, what's changed between then and now? I don't know. That's a good question. I suspect we will not know the answer entirely. But if I had to guess, I would say. I'm just talking now of Zomato launching their 10 minute thing with restaurants. Forget their separate apps for a second. That's a separate story. I imagine for whatever reason they believed that last time we didn't have enough restaurants who were quote unquote bought into this. This time, maybe we have better incentives. maybe we have some restaurants that are desperate. Maybe we have some partnership that we have struck with somebody. And so for that reason, we believe that this time it will work.

But funny enough, we have examples out there of it not working, right? For instance, PGK, Swiggy Snack, Double C, tied up with Blue To K just earlier this year. Sorry, was that, that was not snack? It was snack, no? Or wasn't it Swiggy Bolt? I think it was snack. Let me check. I checked in the morning.

Really? Yeah. Yeah, it was snack. Okay, fine. But tell us about that. Okay. Yeah, so Swiggy's snack ties up with Blue Tokai in January. Within a couple months, that falls through for a bunch of different reasons.

Why do you think that would have happened? Okay. So this is interesting. I think what happens is, so this is actually a little confusing because I thought snack would be practically white-labeled. So in the sense that if you open Zepto Cafe, you don't see any brands in there. It is just Zepto Cafe saying, via Zepto Cafe, here is our cup noodles, or here is our, you know, tea, or here is our coffee, or here is our biryani or whatever it is. They have a bunch of products or samosas or something.

I don't think they don't have brands in there, correct? Similarly, if I open, say, Swish, I just open Swish, which is another one of these 10-minute delivery companies that's coming through dark stores. And I'm just looking at their products, hot Americano, hazelnate, cold coffee, chicken arabia ta pene, spice buttermilk, wadapaw, samosa, peri, peri french fries. So you see what I mean? It's like there's no brand associated with this, right? So I thought snack was doing that. But in this case, snack has some tie up with blue to kai.

So here's what I remember. I remember that the real difference between snack and blue to kai happened. They announced it very in a big way in like January, I think. And I think one of the sources said that they could not agree on the pricing. and the menu, right? Blue Tokaye wanted different kind of items on the menu. Swigy wanted different kind of items and so as a result, they just couldn't agree with each other.

Which is again the same reason why you would try to do dark stores and white label everything and build it yourself, which means that what you do is you'd install a coffee machine there, you'd get a guide to be a barrister there, you'd get beans from somewhere, you would have like a few set of products that already pre-bought and kept in your dark store and you just send it out whenever you can. So I don't know what the Blu-Toki thing. was about. But again, it makes sense, which is that I imagine someone like a blue toke, I must have wanted to say, these are our higher margin products or these are our representative

products with our brand. You can't just go and sell these products because these are like lower and maybe cheaper and not really it. So maybe they disagreed on that. And so that didn't work out. And that could be annoying for a restaurant, right? Like, especially if you're doing this at scale and there's so many restaurants involved, if an aggregator comes in and is telling you how to do. Yeah, I don't even know why snack was talking to blue to go in the first place and just didn't do. what Zepto Cafe is doing or what Swish is doing, which is just have... Private label, like what products or white label products. But why did they not do that?

I don't know why they did not do that. It's a good question. So, PGK, this whole thing, I mean, what we're talking about, you know, the whole idea is to kind of, like you were telling us in the morning also, you know, to own or sort of control the whole chain as much as they can, right? Which is what they did with snack and bistro. But, you know, the more verticals they keep adding, like, it's going to get more complicated, right?

Can you give me an example? Like, for what? Like, for example, quick. Like, snack and bistro are already great because that way they have more control over the whole chain, right? But with something like quick or, yeah. Sorry, I'm just saying, I don't know if it's about control as much as it's about, it's a defensive strategy. It's like saying does Flipcard minutes give Flipcard more control? No, Flipcard is doing Flipcard minutes because Flip card is like kind of getting packed.

paranoid and getting a little scared of losing whatever it has acquired and gained. So hence you launch this in order to make sure that you can't, nobody else takes their eats their lunch in this case literally. Sorry, Snikdabato, you're saying what? Just go on, please. No, I mean, the whole point was like if this, you know, it just continues, like, you know, will these food delivery companies like Zomato like at some point become like, you know, food companies themselves like what, you know, Zepto has its own in-house.

thing going on, they make their own food with Zepto Cafe. So, like, is that, like, something that is a possibility in the future? But isn't that what's already happening? I mean, that's what I'm trying to say, which is that if you open bistro, right, how is Bistro different from Zepto Cafe? It's not. How is it different from Swish? It's not.

I haven't used snack. And by the way, I'm just, I just downloaded Stack now in front of, because I'm, I'm very intrigued why they basically got a brand in there, or where, the brand came into. But wasn't someone also, someone had a tie up with Starbucks. I think it was Zepto or something where they were selling you

Starbucks in 10 minutes or something. Well, maybe. Again, look, again, I'm just look at this. I have opened snack, right? I'm just telling you the first tab is this thing called must try, okay? Y, Y, Bheel, Korean garlic bun, veg puff,

Punjabi-Aloosca, mini peri-peri samosa, bun masala. Okay, now let's say this Korean garlic bun. It doesn't say anything. You just say sweet, salty, garlic. There's no other brand here. There's nothing else over here.

They don't promote any brands anywhere. It's exactly like how a Zepto Cafes. It's exactly like a bistro. It's exactly like a Swish. They have their Maggie. They have their stuff and it's all theirs. Right. So in some sense, they're already food companies.

But what then is the purpose now, right? Because when they started out last year, from what I understand, like when Zepto Lons Zepto Cafe, the idea was to increase AOV. but now it's clearly not that right when you spin it off into an independent app it is an entity on its own so what then is the end goal

with like bistro or with cafe or with no I think the the thing is look let's let's go one at a time okay let's look at incentives I like looking at incentives if we look at Zepto Zepto's incentives are clear like I said you're an insurgent you're going category by category at some point you'll run out of categories

you want to keep feeding the monster well pharma is complicated alcohol is complicated maybe food is not so complicated let's go there. I don't know if it is to create average order value increases, they've said those things. I'm just not particularly sure if that's true.

So they just created a new category and said, why not? Okay. Just like how you would basically say. In typical Zepto fashion. Yeah, but it's also true for everybody else. It's not new to Zepto also. But let's say, for instance, it's like Blinket saying,

can we do printout? Sure, why not? It's like that. It's like Zepto saying, can we do food? Yeah, I guess why not? And it sort of worked, right? So it's in Zepto's interest to create this kind of a product, to create more categories.

And it so happens, they span it out, because I guess they saw consumer behavior is different. People don't buy a samosa and well, Atta. Yeah. Exactly. Right? So they probably spun it out and screw it.

Let's keep it separate. Right. So it makes sense from their standpoint. From Zomato and Swigi standpoint, it again makes sense because you have to defend your turf on this side. Right. So on this side, you launch this thing called bolt and instant in order to defend yourself and try to provide. And you basically pitch it to restaurants by saying, hey, this is an opportunity for you. If you start delivering.

stuff in 10 minutes, well, then people will have more reasons to eat canteen food type stuff, which I don't know. It sounds really strange. It's like trying to create a new behavior. How many times a day are you going to eat? Right. Just because something comes to you in 10 minutes, doesn't mean you eat more often, right? It's hungry college kids or stoned college kids. Stoned college kids is a great market. Okay. Anyway, I just want to say that when Zepto started, I called them a grocery startup. I'm not going to make a mistake again. Maybe it's not stoned college kids. Maybe it's like really nice people. who are very accomplished in life.

I don't know. I've learned my lesson. And they want to eat piri, piri fries. Yeah, okay. Who knows? So from Domato and Swigi standpoint, it makes sense why they tried out bolt and instant. Because it's literally a defensive strategy.

I don't think it's an offensive strategy. You can position it as an offensive strategy, but I don't think it is, right? That's one. I think bistro and snack is a, is now on this side. Now they have come on this side. And that is now an insurgent strategy.

Where now you're looking at it and saying, okay, we Zepto has launched Zepto Cafe because they're trying to expand the categories of quick commerce. Let us also expand the categories of quick commerce and launch bistro and launch snack because let's do the same thing

that they're doing. So in that case, Zepto has sort of like forced their hand to expand categories over there. I think if you really think about it, right? There are two outcomes here which are very interesting, right? Outcome number one is what does it mean for Zomani?

to stop instant, but for Swiggy to double down on bolt. On board, yeah. So, I mean, just for context for our listeners, because they don't know this, because we were talking about this. So, Zomato is very unequivocal. They said, okay, look, this thing that we launch call instant is not working and we're perfectly okay, killing it. I think they're more or less killed it, right? On the same day that Zomato said they're killing it, or I think the day after, Swiggy came out with a press release, okay, which is a little unswiggy like, to be very honest,

where they said, we are expanding bolt to 500 cities in India. First of all, I didn't know there were 500 cities in India, but much less

Swiggy was there in 500 cities. Now it seems there are 500 cities where you can get bolt products, right?

Again, let me stress. These are not dark stores that Swiggy has set up. These are restaurants in these cities who

deliver in 10 minutes. Seems like a really aggressive doubling down. But what is working for Swiggy that clearly didn't work for

Zomato. You know, I wish I knew the answer to that question. I don't know. Now, look, there are only two ways to think about it. One way, I think Swiggy has also said, look, Bolt has taken, bolt has become like 8% of her orders or 10% of our orders. And I'm not very surprised by that.

Okay, yes, it has. Because obviously people are going to order food. Just because something that used to take 40 minutes now takes 10 minutes, does that lead to more orders? I'm not so sure. Does that lead to more profitability of the food? delivery business. I'm not so sure. So, I'm a little surprised why Swiggy is doing this, right?

I don't think these 10% of orders that they're saying of Bolt is incremental orders. Think about it, right? If you're Swiggy, happy directly, think about it. If you're Swiggy, right? You have been, you practically have a doopoly. The market has been captured. Everything is done. You are delivering products at 40 minutes, right?

And that's a nice sweet spot that allows you to make some money, the restaurants to make some money. and the customer is also like, fine, whatever, I'm okay with this, right? Now, suddenly for some reason, you're going to go to all of your customers and say, we have a 10-minute delivery option, which is more expensive for us to do, number one, which is more problematic and difficult for the restaurant to fulfill. And we hope that as a result of this, you're going to order many more times in such a way that we become bigger and more profitable. Seems strange.

Yeah. So, PGK, if we can go back to your conversation with Thomas Fenn, you know, and what he was talking about, their partnership with these platforms, restaurants, restaurants, you know, from their perspective, how have they been navigating this shift to 10-minute food delivery? Like, clearly, like, because Swiggy, for example, is doubling down on bold, like saying 500 cities, that means they are increasing the number of their restaurant partners, right? So how are these restaurants going to navigate this shift, you know?

The restaurants, I mean, look, the perspective that we got in that 2 by 2 episode was the restaurants are like, please, can you stop doing this? Can you leave us out of this? We do not want to be a part of this. You are already killing us. Don't kill us even more, right? Because think about it. From a restaurant standpoint for, again, I'm just taking all restaurants as an umbrella term. But I don't think it's controversial to say that most restaurants are unhappy with Swiggy and Zobato with the way they're taking commissions.

and they're quite unhappy about it. So that's not controversial at all. From their standpoint, it's like, already you're stabbing us. Can you please stop pouring acid on our head? It's a little bit like that, right? Why do you want us to do this? Now, I get Zomato and Swiggy's pitch. Another way to think about it would be that

Swiggy has figured out what to do to convince enough restaurants to get on this bandwagon, which for some reason, Zomato has not. That's another interpretation, right? Which is possible, it's surprising, but it's possible. I'm curious to know what it is that we'll probably find out in a bit, right?

I think that's one. I think there's another thing that makes it a little more interesting for me, which is 500 cities is, I mean, they're saying 500 cities. Okay, Swiggy, he's saying 500 cities. But actually, if you really think about it, food delivery, I think, is fundamentally it's profitable. only in like four or five cities, probably a little more, maybe eight if you really stretch it. The rest of them are not really profit-making places. So why would you do it?

I'm really not sure. You do it only if you think that it would get you additional growth, incremental growth, like I said, or it will get you incremental profitability. I don't know, I'm not convinced either of them seem to happen by suddenly changing customer expectations down to 10 minutes. for something that you already had control on and you already had won.

Why would you do it? It's like, I'm trying to think of an analogy. It's like if Indigo said, you know, we know that our tickets are expensive. We know that our service is this thing. We know all of these things. Here is this thing, Rahil. Let's give you tickets at 50% off

and you can get to Mumbai in, you know, half the time. I mean, why would you do it? What are you hoping to achieve? You've already won, okay? Air Deacon did some version of that, but you didn't bar. No, but that is different. You started off because you wanted to. There were an insurgent.

But now you're dominating and then you're going ahead. That's an insurgent strategy. So it's very strange for me to see Swiggy do an insurgent strategy to something that it has already won. Correct. Which is strange. So that's one way to think about it, right? The second way to think about it is on this side, which is the 10 minute side, which is if you see now, practically, whether you're zeptor, whether you're blinket, whether you're instamart. Fundamentally, you have become horizontal quick commerce companies.

right? I know we made fun of Instamart earlier by saying it had Instamart it had something else. Swiggy Mall. They had like multiple things that are all broken up in different weird places

but I think they got their act together they put it all together and said everything is Instamart now you can get everything under one roof fine, great. But they are horizontal quick commerce. History has told us

that whenever something horizontal comes up in e-commerce it has always succeeded by verticalization of e-commerce. So what I mean by that is Flipcard and Amazon had a doopoly and then they basically said great we are one and then mintra came along well mintra was there a little earlier but still technically the construct still holds where mintra came along and said

do you really think you're going to buy jeans on amazon come and buy apparel here we are the apparel specialty licious came and said we specialize in meat somebody else came and said we specialize in home equipment like urban ladder came and said we specialize in furniture you can buy furniture on flip card and amazon in some cases you could buy urban ladder furniture on Flipkart and Amazon, but you'd go and buy it on Urban Ladders website. It's what the kids call picking a lane and saying to it. Yes, because the argument in e-commerce was that there are certain product experiences, brand experiences and positioning experiences that you can do vertically that horizontally

you can never do. Right? So maybe that's true about quick commerce too. We don't know if that's true. Right now we are saying it doesn't sound so absurd for us to buy. anything from, say, flowers to groceries to, well, apparel to, you know, batteries to air conditioners on blanket. But maybe that's not going to hold. Maybe a company is going to come along and say, hey, you want beauty products?

We are the beauty experts. And you can buy top quality beauty products from us and we'll deliver it to you in 10 minutes. It's like the NICA of 10 minute, exactly. The NICA of QuickCover. What Nica did to e-commerce companies, I can see NICAR. some companies that are doing that to these guys as well. But PGK I also wanted to talk a little bit about the customer side of things, right? Like, we did, like Rahel mentioned, college kids who are, you know, looking for biryani and burger and fries.

But, you know, like what Zomato said when they shut down quick was one of the reasons they said that it didn't see it. The demand was tepid, right? So if that must go through for. Yeah. They said that. Demand rent really pick up. Yeah. And they positioned it very much as an experiment.

No, that you will do at some point. No, but I feel like this is interesting because, sorry, finish your points. Yeah. So, no, I was trying to ask if, you know, Zomato face this, then I'm sure it kind of holds true for other platforms as well. Like, so do consumers really, is there an actual demand for like a 10 minute biryani? No, no, no. I am not stepping on this landmine.

This landmine, I have. I have learned the hard way and the painful way. I remember when they started doing 10-minute deliveries and a lot of people online, luckily I wasn't one of them, were like, who really needs an air conditioner or a PS4 in 10 minutes? Those same idiots are ordering stuff in like 10 minutes. No, I refuse to step on this landmine. Maybe people want biryani in 10 minutes or 2 minutes.

I don't care. It's fine. I am not here to judge. No, but I think the point that I was going to make is that's interesting. because if Zomato is saying the reason they shut down quick is because of tepid demand, what is this demand that only Swiggy sees that Zomato does not say? Yeah, exactly. Right?

So, assuming they are right in that, or at least they're being honest in that reason. Who is this? Who is this Swiggy customer that's willing, sorry, who is this person who is willing to order stuff on Swiggy in 10 minutes? But for some reason does not want to order stuff for. 10 minutes on Zomato. Who is this person? It seems really strange. Maybe what's happened is

Zomato, well, maybe they didn't see demand. I'm sure that's partly true. But perhaps a better way to think about it would be that maybe they didn't want to blame the restaurants. Because I think the last time they said restaurants, maybe this time they're like, well, we can't blame the restaurants twice. Let's blame the people and the consumers themselves. But I feel that that's a strange thing.

Really, like, come on. History has talked. If somebody says, here is this, you know, biryani in 10 minutes, do you want it? Who's going to say no? Even you will not say no, Rahel. Come on. Can't accept or deny. I'll take fries.

Daybreak is produced from the newsroom of the Ken, India's first subscriber-focused business news platform. What you're listening to is just a small sample of our subscriber-only offerings. A full subscription unlocks daily long-form feature stories, newsletters and podcast extras. Head to the ken.com and click on the red subscribe button on the top of the Ken website. Today's episode was hosted and produced by Rahil Filippos and I, Sintas Sharma, and it was edited by Rajiv Sien.