INDIA- India’s largest food delivery, dining, and restaurant discovery service Zomato has announced a 123% rise in revenue to Rs 4,109 crore (US$340m) in the 2021-22 financial year.
The company in its annual report said its average monthly transacting customer base grew by 116% in the year.
However, the firm’s loss increased by 24 percent to reach Rs. 1,098 crores (US$90m).
The report noted that the online food delivery service expanded to over 1,000 locations by the end of this fiscal year (up from 455 cities as of the end of FY21).
Zomato however noted that the GOV (gross order value) contribution from new markets is extremely low currently.
The company however launched to these markets early with the objective of being a first mover and benefiting from growth as these markets scale over time.
Historically, they have seen markets beyond the top eight cities become significant contributors to their overall GOV over time.
The company recently announced plans to physically audit cloud kitchens that manage more than 10 brands from a single location to prevent operator malpractices.
Food Safety and Standards Authority of India (FSSAI), announced that cloud kitchen businesses are free to operate several brands under a single FSSAI license (typically specific to a kitchen), according to the post.
Fly-by-night businesses, which make up fewer than 0.2% of registered kitchens, were found to take advantage of the law’s latitude by launching numerous brands from the same kitchen.
These brands sell products with little to no differentiation; instead, they deceive or mislead consumers by giving them the impression that there are more options available than there are.
On Zomato’s site, most of the brands that these operators operate likewise receive subpar reviews and ratings.
“While there is no exact science to the right number of brands, we believe that even the most organized outlets in the industry don’t see operational benefits and customer trust in operating too many brands from a single kitchen,” Zomato said in a blog post.
“Going forward, we are going to manually check any physical location which runs more than 10 brands out of a single location,” Zomato said.
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