Zomato to terminate grocery delivery service from September 17

By Team Newsable | First Published Sep 12, 2021, 4:02 PM IST

Zomato, in its mail sent on September 11, 2021, to its grocery partner said it intends to stop its pilot grocery delivery service effective September 17.

Food tech platform Zomato has pulled the plug on its nascent grocery delivery service from September 17 mainly on account of gaps in order fulfilment, leading to poor customer experience and increasing competition from rivals that are promising express delivery in 15 minutes.

The company believes that its investment in Grofers will generate better outcomes for its shareholders than in-house grocery efforts.

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In an email to its grocery partners, Zomato said, “At Zomato, we believe in delivering best in class services to our customers and largest growth opportunities to our merchant partners. We don’t believe that the current model is the best way to deliver these to our customers and merchant partners. Hence, we intend to stop our pilot grocery delivery service effective 17 September, 2021”.

The email mentions that “store catalogues are very dynamic and inventory levels change frequently. This has led to gaps in order fulfillment, leading to poor customer experience”.

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“We have realised that it is extremely difficult to pull off such a delivery promise with high fulfilment rates consistently, in a marketplace model (like ours),” the mail said.

When contacted, a Zomato spokesperson said, “We have decided to shut down our grocery pilot and as of now, have no plans to run any other form of grocery delivery on our platform. Grofers has found high quality product market fit in 10 minute grocery and we believe our investment in the company will generate better outcomes for our shareholders than our in-house grocery effort,” quoted news agency PTI.

Earlier Zoamto had said that it had invested USD 100 million (around Rs 745 crore) for acquiring a minority stake of 10% in grocery delivery platform Grofers.

Zomato had forayed into the grocery delivery service, a pilot project in July this year in select markets offering grocery delivery within 45 minutes to its customers. Whereas its rivals such as Swiggy, Dunzo, however, have a different model, where they set up dedicated dark stores to service grocery orders within 15-30 minutes.

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