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Zomato Introduces Parcel Delivery Service, ‘Xtreme’ With Primary Focus On Merchants


The prominent Indian food tech company, Zomato, has introduced a hyperlocal delivery service called ‘Xtreme‘. This service aims to leverage the extensive fleet of over 3 lakh two-wheeler delivery executives that Zomato has at its disposal. Xtreme is designed to cater to the needs of both small and large businesses for the intracity delivery of small packages. The service has already been rolled out in nearly 750-800 cities where Zomato provides food delivery and is accessible via a separate app.

Xtreme’s Versatile Range of Deliverables

Xtreme offers a versatile solution for businesses and individual users by allowing them to ship small parcels of items that encompass a wide spectrum of products, including documents, medicines, food, groceries, apparel, cosmetics, and more. These parcels can weigh up to 10 kg, making it a flexible option for a variety of delivery needs.

Pricing and Competition

For users availing Xtreme’s services, Zomato charges an initial fee of Rs 25 for the first kilometer of delivery, with the tariff increasing incrementally for each additional kilometer. It’s important to note that these prices do not include the Goods and Services Tax (GST) component. This competitive pricing strategy pits Zomato’s Xtreme against other popular operators in the hyperlocal delivery space, such as Dunzo, Swiggy, Uber, and Ola.

The Evolving Hyperlocal Delivery Landscape

Zomato’s entry into hyperlocal deliveries with Xtreme is noteworthy, as it coincides with significant changes in the hyperlocal delivery market.

One of the key players in this space, Dunzo, backed by Reliance Retail, is facing operational challenges, leading to increased competition. Ola, backed by SoftBank, has recently introduced its hyperlocal delivery service with Ola Parcel, powered by electric two-wheelers. These developments reflect the intense competition and evolving dynamics in the hyperlocal delivery segment.

Strategic Advantage for Zomato

One significant advantage Zomato possesses in the hyperlocal delivery space is its extensive presence across numerous Indian cities. With a wide footprint in cities where there is a substantial market for food deliveries, Zomato is well-positioned to attract small merchants and businesses seeking swift and efficient intracity deliveries. However, in larger cities where time-sensitive deliveries are crucial, there might be challenges for Zomato, as customers may prefer faster delivery options.

Zomato’s Recent Success and Outlook

Zomato’s move into hyperlocal deliveries with Xtreme comes on the heels of its remarkable financial performance. The company reported a consolidated net profit of Rs 2 crore for the quarter ending in June 2023, a significant turnaround from the Rs 186 crore loss incurred the previous year. By the end of the fiscal year 2023, Zomato boasted an active delivery executive fleet of 3.26 lakh, indicating the company’s significant reach and resources for its hyperlocal delivery ambitions.

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