Deepinder Goyal has written to restaurants over their concerns of 10-minute delivery stating that Zomato is not competing with restaurants, and that Bistro is not a “private label" or "Zomato kitchen.”

In an email dated January 17, accessed by CNBC-TV18, Goyal said he wanted to offer his point of view given there is a lot of chatter around 10 minute food delivery and also conjecture about whether it's an existential threat to the current restaurant industry in India.

He said that Bistro has been launched targeting the large in-office market wanting quick access to snacks, meals, and beverages within 10 minutes, a market currently addressed by on-site vendors, or vending machines.

Goyal added that the Bistro team is working holistically with food researchers, producers, chefs, and restaurants to provide a proof of concept. Her added that while the company is unsure about finding product-market fit and profitability, the hope is that this platform could be replicated by different restaurants and cuisine types where demand exists.

“In the past, I have expressed that Zomato as a restaurant-aggregator will never compete with its own restaurant partners, unlike players such as Amazon who sell their own private labels on Amazon. Zomato has fully backed this commitment by never opening a physical restaurant and will NOT use Zomato as a distribution channel for kitchens that we do. Bistro is a separate app, and its menus are curated using publicly known snacking patterns. The Bistro team has no access to data that would create an unfair playing field. In fact, all Zomato data and insights are available to all restaurant partners and the public through Zomato Trends,” Goyal wrote in his letter.

He added that Bistro will not be an existential threat to the restaurant industry, and that even at 1,000 outlets, Bistro would barely be 0.5% of the market.

He added that the goal of the experiment with Bistro is not to scale the offering, but to  find a workable business model that the restaurant industry can replicate. ”India's out-of-home food consumption has room to expand, and new service models like Bistro will help acquire new customers, benefiting the wider restaurant ecosystem. Running a restaurant is a hard job, we know it as much as you – and you are the best people to do it,” he wrote.

Two weeks ago, NRAI strongly opposed the launch of Bistro and Swiggy’s Snacc labelling them as private labels that has the potential to impact 1000s of smaller restaurants and goes against their stated promise of not entering the space. In an interview to CNBC-TV18, NRAI President Sagar Daryani had said that while restaurants are kay with the launch of 10-minute delivery offerings, what they are completely opposed to, is the launch of private labels.

Referring to the launch of 15-minute food delivery via its main app, he added that the service will be scaled if it brings in the desired outcomes, and that Zomato is discussing reduced commissions for short-distance orders to encourage more outlet expansion to improve the delivery speed.

“Back in 2022, by working with restaurant partners, we launched ‘Zomato Instant’ for 10-minute food delivery. While moderately successful at reducing KPT, we couldn't find the right economic model for  restaurants and hence shut it down. A few weeks ago, we enabled restaurants to offer ‘15 minute delivery’ in select locations, by curating their menu items and providing dedicated delivery fleets. Available only in a handful of locations, the service will be scaled as and when it gets to the desired outcomes,” he wrote.

In his letter, Goyal also wrote that bringing down delivery times increases demand for restaurant food. He wrote that Zomato’s data suggests that reduction in the average delivery time from 45+ minutes in 2018 to about 30 minutes today, has contributed to doubling the food delivery market size.

He added that their data shows a 3x higher repeat rate from customers when delivery time is under 15 minutes, compared to more than 30 minutes.

“This means that reduction in delivery times will significantly expand the market. Most of this comes down to making sure our kitchen networks are more dense (more outlets per city) to cut down distance, and cut down kitchen preparation time (KPT) while still serving hot and fresh food that customers require. And doing this in a way where restaurants can make money is not an easy problem to solve,” he added.