Zomato Launches Zomato Xtreme to Expand into Logistics Services for Merchants

• ByStartupStory     |    October 14, 2023

Zomato, a prominent name in the food delivery industry, has ventured into the logistics sector with the launch of Zomato Xtreme. This new offering aims to empower merchants to send packages, starting at an affordable rate of Rs 35. To support this expansion, Zomato has introduced a separate Android app, dedicated to Zomato Xtreme. The move demonstrates Zomato’s diversification efforts, expanding beyond its food and grocery delivery services provided through Blinkit. While food delivery remains its primary business, Zomato’s exploration of alternative verticals, like Hyperpure and dining, can help streamline costs by optimizing its vast network of delivery partners.

Zomato originally introduced Hyperpure in 2018, focusing on delivering fresh produce and daily essentials to restaurants. This segment is poised as the company’s next growth driver. In recent quarters, the supplies business has significantly boosted Zomato’s revenues. In addition to this, Zomato plans to expand its range by introducing ready-to-eat products such as desserts and beverages. This strategic diversification in offerings appears to be well-received, as Zomato reported its first-ever quarterly profit in the April-June period. Operating revenue experienced a substantial 71% increase, rising to Rs 2,416 crore from the previous year’s Q1 revenue of Rs 1,414 crore. The success of Hyperpure and the company’s persistent pursuit of new business avenues are expected to have a positive impact on Zomato’s financial performance.

While Zomato’s primary business focus remains in food delivery, the introduction of Zomato Xtreme suggests the company’s intent to expand its horizons and diversify its sources of revenue. This new offering is expected to place Zomato in competition with logistics providers like Shadowfax, Dunzo, and Borzo.

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Zomato’s shares recently closed 1.23% higher, reaching Rs 111.20 per share.

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