Tag: zomato

Chinese Group Alipay Said to Have Sold 3.4 Percent Stake in Zomato

Chinese payments group Alipay plans to sell its 3.4 percent stake in Indian food delivery giant Zomato for nearly $400 million (nearly Rs. 3,333 crore) through block deals on Indian stock exchanges, according to three sources and a Reuters review of the deal’s term sheet.

Alipay, owned by Ant Group, will offload its entire 3.44 percent stake in the deal, the term sheet seen by Reuters showed.

Bank of America and Morgan Stanley are advisers on the deal, which is likely to be executed later this week on Indian exchanges, said the three sources, who declined to be named as the plan is private.

Zomato, Bank of America and Morgan Stanley did not immediately respond to a request for comment. Alipay also did not respond outside regular business hours.

Zomato shares have surged more than 90 percent this year, after falling by more than half in 2022 when tech stocks struggled around the world. 

Alipay “wants to cash out … the (market) timing is good,” said the first source, referring to the rapid rise in Zomato’s shares in recent months.

The block deals are set to be executed at Rs. 111.28 per share, a 2.2 percent discount to Zomato’s close on Tuesday, the term sheet said. 

In October, Japan’s SoftBank sold a 1.1 percent stake in Zomato, which is India’s biggest food delivery service. Demand for online ordering has rapidly grown in recent years, prompting companies like Zomato to aggressively expand.

Alipay’s exit from Zomato comes as other Chinese investors have been paring their stakes in Indian companies. In August, China’s Antfin sold a 10.3 percent stake in Indian financial giant Paytm.

Tech stocks such as Zomato have staged a rebound after a drubbing last year amid a market meltdown, when investors also raised questions about sky-high valuations of some Indian startups that had made their stock market debut in recent years.

© Thomson Reuters 2023

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Swiggy Said to Have Initiated Talks for IPO Plans, Eyes Stock Listing in 2024

Swiggy, the Softbank-backed food delivery company, is eyeing a 2024 stock market listing and has initiated talks with bankers to assess its valuation, after halting the process for months due to weak markets, three sources with direct knowledge of the matter said.

Swiggy, which delivers food from restaurants and also groceries, was valued at $10.7 billion (nearly Rs. 88,350 crore) in its last fundraising in 2022 but like many Indian startups put its IPO plans on hold amid a funding crunch and investor concerns about stretched valuations.

But as global and Indian markets have rebounded Swiggy has restarted its IPO planning by inviting eight investment banks to make pitches in early September to work on the IPO, including Morgan Stanley, JP Morgan and Bank of America, two of the sources said. 

Swiggy is using the last funding round valuation of $10.7 billion as a benchmark for IPO planning, said one of the sources, who is directly involved in the planning process. But this source said the company has yet to decide on a potential stake sale or final valuation. 

Invesco, a minor shareholder in Swiggy, in May valued the Indian company at around $5.5 billion (nearly Rs. 45,400 crore), it said in a filing. 

Swiggy had initially considered raising $800 million (nearly Rs. 6,600 crore) to $1 billion (nearly Rs. 8,260 crore) via the IPO, banking sources who worked on it in early 2022 have said. 

Swiggy, JP Morgan and Morgan Stanley did not respond to requests for comment, while Bank of America declined to comment.

The three sources said Swiggy is aiming to list between July-September 2024 which would be after national elections in India due by May.

Swiggy rival Zomato‘s shares have risen 54.8 percent so far this year, in a sign that investor confidence is returning to India’s financial markets.

On Friday, Indian grocery startup Zepto said it has raised $200 million (nearly Rs. 1,650 crore) in fresh funding at a valuation of $1.4 billion (nearly Rs. 11,560 crore), making it the first Indian startup to cross the billion-dollar valuation mark in nearly a year.

Swiggy in May said its core food delivery business had turned profitable, nine years after starting operations, even as its newer grocery delivery service, Instamart, continues to make losses.

© Thomson Reuters 2023

 

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Yulu Plans to Expand Operations in India and Abroad, Expects to Turn Profitable

E-bike rental startup Yulu, which is looking to go public, expects to turn operationally profitable by September and plans to expand its presence in India and abroad, its chief executive said.

The startup, which currently operates in Bengaluru, Delhi and Mumbai, will venture into cities including Hyderabad, Pune, Chennai, Kolkata and Ahmedabad over the next 15 months.

It will also explore partnerships with local entrepreneurs in smaller markets such as Varanasi, Agra and Goa.

“Yulu is open to give its technology platform to anyone who wants to run a small fleet in cities where we do not have a long-term plan to run it,” CEO Amit Gupta told Reuters.

The plan comes amid a broader government push for the electrification of shared transport and at a time when Yulu relies on its tie-ups with delivery firms Zomato, Swiggy and Zepto to fend off rivals, including Gogoro-backed Zypp Electric and SoftBank-backed Ola Electric.

Delivery executives account for 60 percent of Yulu’s fleet utilisation and revenue share, the startup said in a statement to Reuters, adding that more than 50,000 of them used its services in FY23.

Co-founded by Gupta, RK Misra and Naveen Dachuri in 2017, Yulu is aiming to achieve a four-fold increase in its fleet to 100,000 vehicles by the end of the current fiscal year.

The startup’s annual losses had narrowed to Rs. 555 million in FY22 from Rs. 611 million in FY21, a company spokesman said, adding that the annual results for FY23 were yet to be released.

Yulu’s bikes are made by Bajaj Auto, which exports vehicles to over 70 nations. The startup plans to piggyback on the industry veteran to venture abroad.

“The countries looking interesting are the ones where EV is there as a policy” such as Thailand and Indonesia,” Gupta said.

© Thomson Reuters 2023

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Government Asks E-Commerce Firms to Create Framework Against Dark Patterns: Consumer Affairs Secretary

The government has taken a serious note of ‘dark patterns’ and asked e-commerce firms to create a self-regulatory framework to stop such practices, Consumer Affairs Secretary Rohit Singh on Tuesday said.

The e-commerce sector has the largest contribution to dark patterns, and the framework will be created in the next two months, Singh told reporters here after a stakeholder meeting.

Dark patterns refer to practices which deliberately exploit the consumers on the internet, like adding items to a shopping cart even though a user has not opted for it, changing the price of a product at the time of checking out or even creating a false sense of urgency to advance a buying decision.

Singh, who was present in the over two and half hour meet here, said he has asked the e-commerce players like Amazon, Flipkart, Swiggy and Zomato in association with the Advertising Standards Council of India and some law firms to create a self-regulatory framework to help curb such practices.

He said education and awareness are very essential as, many a time, the consumer and seller on a marketplace like an e-commerce platform are not aware of the modus operandi deployed by intermediaries to maximize sales or make a sale happen.

If such practices continue even after awareness and creation of a self-regulatory framework, the government may look at coming up with regulations on the matter, Singh said, adding that the statutes governing consumer protection are very wide right now and dark patterns do fall under unfair trade practices.

However, enforcement of the law by acting against errant brands may be counter-productive, and hence, efforts are being made to take a step-by-step approach at present.

Asci’s chief executive Manisha Kapoor said the ad industry’s self-regulatory body will be coming out with its guidelines on dark patterns very soon, but added that it is a wider subject concerning areas beyond advertising, like transactions, subscriptions etc.

“Many (e-commerce firms) say we are marketplaces and do not have full controls, but I think, we are going to push back on that,” she made it clear.

Singh also said that the government has made it clear to e-commerce firms like Amazon and Flipkart that the consumers’ trust in the brand gets them to shop on their platform, and hence, they cannot shy away from responsibility and will have to share some liability in case something goes wrong.

He, however, made a distinction between e-commerce players and the state-promoted ONDC (open network for digital commerce), saying the latter is a protocol, which has all the buyers, sellers and also marketplaces like Amazon and Flipkart on it.

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Sun Mobility Partners With Zomato to Power 50,000 Electric 2-Wheelers Over Next Two Years

Electric vehicles energy infrastructure and services provider SUN Mobility on Monday said it has entered into a partnership with online food delivery platform Zomato to power 50,000 electric two-wheelers of the latter’s fleet over the next two years. Under the partnership, SUN Mobility will provide its battery swap solutions for last-mile deliveries with the initial fleet deployment to start in the National Capital.

Through this association, the last-mile delivery partners onboarded on Zomato’s platform will benefit from convenient and cost-effective battery swapping solutions for their e-2Ws (electric two-wheelers), the company said in a statement.

The association with Zomato is a significant step towards achieving SUN Mobility’s goal to build a sustainable and environmentally friendly ecosystem, SUN Mobility CEO Anant Badjatya said in a statement.

“By deploying 50,000 electric two-wheelers in Zomato’s fleet, we are reducing our carbon footprint by 5,000 MT/month and contributing to a cleaner environment,” he added.

Zomato COO-Food Delivery Mohit Sardana said, “our associations in the past and now with SUN Mobility to swap batteries will accelerate the transition to EV-based deliveries, further helping us keep our promise of a sustainable Zomato for customers, delivery partners, employees and the planet.” The two companies said their move is aligned with Zomato’s commitment to ‘The Climate Group’s EV100 initiative that implies 100 per cent EV adoption by 2030′ and is also in line with SUN Mobility’s mission to electrify last-mile deliveries in India.

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Zypp Electric Raises $25 Million Funding, Aims to Expand to Mumbai, Chennai by 2025

Zypp Electric said on Wednesday it has raised $25 million (nearly 206 crore) in a series B funding round led by Taiwanese battery-swapping service provider Gogoro, as the Indian electric vehicle startup looks to expand to new cities and boost its fleet size.

The funding round marks Gogoro’s latest effort to expand in India, where EVs are receiving mainstream push, having partnered with the country’s top bikemaker Hero MotoCorp and the state of Maharashtra.

“Electric vehicles are what the entire (delivery) industry is looking forward to,” Zypp‘s Chief Executive Officer Akash Gupta told Reuters.

The startup, which provides EVs for last-mile delivery for online stores, plans on using the funds to increase its fleet size to 2,00,000 EVs from 10,000, and expand to 30 Indian cities including Chennai and Mumbai by 2025, up from six currently.

Delivery companies in India are gearing towards cleaner mobility, with Amazon aiming to have 10,000 EVs for deliveries by 2025, while Walmart‘s Flipkart plans to have 25,000 EVs by 2030.

Several new and existing investors, including Goodyear Tire & Rubber’s Goodyear Ventures, 9Unicorns and WFC, participated in the funding round, which comprised $20 million (nearly Rs. 165 crore) in equity and $5 million (nearly Rs. 40 crore) in debt. 

Founded in 2017, Zypp has partnered with online shopping platforms Flipkart and Myntra, food delivery service providers Zomato and Swiggy, and grocery players Zepto and Blinkit.

It also aims to grow its operations by hiring across technology and top-level positions at a time when a few Indian startups are laying off hundreds of workers to reduce expenses.

Zypp said it is looking to be profitable in the next 12-18 months.

© Thomson Reuters 2023

 

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Amazon Food Delivery Business to Discontinue From December 29: Report

Amazon, one of the biggest e-commerce websites in India, is reportedly shutting down its food delivery business in December in the country. While Amazon’s food delivery business has not been as successful as Swiggy or Zomato, the announcement comes as a surprise has the company has recently decided to put an end to its edtech unit as well. Amazon’s latest decision to shut its food delivery business was reportedly communicated to its restaurant partners, mentioning the closing down of these services by December 29.

According to the Amazon‘s communication accessed by The Economic Times, the company has made it clear that its food delivery business, called Amazon Food, will discontinue from December 29. The e-commerce giant has also assured the restaurant partners to fulfil all “payments and other contractual obligations” till the said period.

However, as per the letter, the company will provide access to the partners to Amazon tools and reports till January 31.

“This decision means that you will no longer get orders from customers via Amazon Food after this date. You will continue to receive orders till then and we expect you to continue fulfilling those orders,” Amazon told restaurant partners, as quoted.

Amazon Food was launched in India as the e-commerce giant’s competition to Swiggy and Zomato. The service debuted in Bengaluru in May 2020. By March 2021, Amazon Food expanded to 62 pins across the city Bengaluru.

The announcement to shut Amazon Food comes a day after it was reported that the company is discontinuing Amazon Academy, the online learning platform for high-school students in India. The Amazon Academy platform debuted early last year amid the COVID-19 pandemic.

The company has been in a lot of limelight recently for the mass layoffs, which are confirmed to continue till next year. In a note sent to employees, Amazon CEO Andy Jassy wrote, “I’ve been in this role now for about a year and a half, and without a doubt, this is the most difficult decision we’ve made during that time (and, we’ve had to make some very tough calls over the past couple of years, particularly during the heart of the pandemic).

 

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Blinkit Partners With Apple Reseller Unicorn to Deliver iPhone 14 in Delhi, Mumbai

Blinkit, a quick product delivery firm, has now partnered with Unicorn to deliver iPhone 14. The e-commerce firm announced the new collaboration with Apple reseller Unicorn on Friday. However, the iPhone 14 delivery will be currently limited to Delhi and Mumbai. In India, the sale for newly launched iPhone 14 series (except iPhone 14 Plus), Watch Series 8 and Apple Watch SE (2nd Generation) began today, while the products were available for pre-order starting September 9. Apple’s latest iPhone lineup was announced at the ‘Far Out’ event on September 7.

In a official announcement on Friday via Twitter, quick commerce firm Blinkit informed the users that it has partnered with Apple product reseller Unicorn to deliver iPhone 14 models. According to the tweet, the delivery of these iPhone models will be currently limited to only two Tier 1 cities — Delhi and Mumbai.

As per the claims by Blinkit’s founder Albinder Dhindsa, the company will deliver iPhone 14 models within minutes to the customers. The users will have to update to the latest versions of Blinkit on iOS and Android to avail this facility.

The delivery time of the iPhone 14 models and accessories will be limited to the Unicorn store timings. The app also informs that the iPhone 14 Plus models will be available to purchase starting October 7 as Apple has delayed the arrival of the model. While Apple has fixed iPhone 14 starting price at Rs. 79,900, iPhone 14 Plus will be available at a starting price of Rs. 89,900.

Blinkit, formely known as Grofers, was acquired by online food delivery platform Zomato for Rs. 4,450 crore in June this year. Meanwhile, Apple launched the iPhone 14 series — iPhone 14, iPhone 14 Plus, iPhone 14 Pro and the iPhone 14 Pro Max — on September 7 alongside Apple Watch Series 8 and Apple Watch SE (2nd Generation). Apple has started selling the newly launched products, except iPhone 14 Plus, starting September 16.

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NRAI Says Zomato Pay, Swiggy Diner Discount Offers Against Restaurant Owners’ Interest : Report

The National Restaurant Association of India (NRAI) has reportedly written to its members in the country alleging that online food delivery services Zomato and Swiggy have been making money through their discount programmes, at the expense of restaurants. According to a report, the advisory by the NRAI refers to Zomato Pay and Swiggy Diner programmes, which are said to make restaurants offer discounts, while paying commission fees on transactions. Swiggy Diner lets customers book tables at discounts, while Zomato Pay is the company’s payment service offered to customers.

According to a report by PTI, the NRAI’s advisory alleges that both Zomato Pay and Swiggy Diner do not charge a subscription fee for customers to participate, while restaurant owners must offer discounts of up to 40 percent on the program.

Restaurants must also pay a commission of up to 12 percent on transactions made via payment gateways, while other gateways in the country charge a maximum of 1.5 percent, the NRAI reportedly claimed in its advisory.   

The advisory also questions why restaurants must pay a commission to a “middleman” to offer discounts to their own customers. It also alleges that restaurants must offer discounts to customers paying via the programmes, even if they walked into the restaurant on their own, as per the report.

Zomato offers an online payment mechanism called Zomato Pay, which allows users to make transactions seamlessly on the service, while users can also pay using regular payment methods. On the other hand, Swiggy Diner is the company’s service to book tables at restaurants at discounted rates. 

“With our new dining product, now live in Hyderabad for a few weeks with great results, we are confident that we will create tremendous value and growth for the industry,” a Zomato spokesperson told PTI, adding that the company was looking forward to working with “progressive restaurants who see the bigger picture”. The report states that a Swiggy spokesperson did not respond to a request for comment on the NRAI’s allegations.

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Domino’s India Said to Consider Shifting Business Away From Zomato, Swiggy Over Rising Commissions

Domino’s Pizza India franchise will consider taking some of its business away from popular food delivery apps, Zomato and SoftBank-backed Swiggy, if their commissions rise further, according to a letter seen by Reuters.

The disclosure was made by Jubilant FoodWorks, which runs the Domino’s and Dunkin’ Donuts chain in India, in a confidential filing with the Competition Commission of India (CCI) which is investigating alleged anti-competitive practices of Zomato and Swiggy.

Jubilant is India’s largest food services company, with more than 1,600 branded restaurant outlets – including 1,567 Domino’s and 28 Dunkin outlets.

The CCI ordered in April its probe into Zomato and Swiggy after an Indian restaurant group alleged preferential treatment, exorbitant commissions and other anti-competitive practices. The food delivery apps deny any wrongdoing.

After the CCI sought responses from Domino’s India franchise and several other restaurants as part of its investigation, Jubilant told the watchdog this month that 26-27 percent of its total business in India was generated from online platforms, including its own mobile application and website.

“In case of an increase in commission rates, Jubilant will consider shifting more of its businesses from online restaurant platforms to the in-house ordering system,” the company stated in its July 19 letter addressed to the CCI.

A spokesperson for Jubilant FoodWorks declined to comment, while the CCI did not immediately respond. Zomato, backed by China’s Ant Group, and Swiggy also did not respond.

With the rising use of smartphones and attractive discounts on offer, food delivery platforms have become increasingly popular in India. Jubilant’s warning comes as Zomato and Swiggy face accusations by many restaurants in India that their alleged practices hurt their business.

The CCI case was sparked by a complaint from the National Restaurant Association of India, which has more than 500,000 members, and alleges that commissions charged by Zomato and Swiggy in the 20 percent to 30 percent range were “unviable”.

A senior industry executive with direct knowledge said that Zomato’s and Swiggy’s commissions were a concern for Domino’s and many other restaurants.

“If commissions are increased further, they will lead to profit squeeze of businesses and will simply be passed on to consumers,” said the executive, who declined to be named.

Before the investigation was announced, Zomato told the CCI it negotiates and charges commissions from restaurants but they had no bearing on how listings appear on its app.

Swiggy stated that its commissions were determined by factors such as a restaurant’s popularity or the volume of orders, according to the watchdog’s initial order.

© Thomson Reuters 2022

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