zomato, the food delivery giant and restaurant aggregation platform, recently announced that it has shut down coronavirus-lockdown-zomato-has-started-delivery-groceries-in-80-major-indian-cities-2568161.html” target=”_blank”>Grocery Delivery Services. This is clearly due to gaps in order fulfillment The process, as well as poor customer experience and increased competition from existing players in the market, were promising to provide express delivery in 15 minutes, the food-tech giant said in an email to its kirana store partners. On September 2021, Zomato informed its kirana store partners that it intends to stop the pilot initiative with effect from September 17, according to PTI.
“At Zomato, we believe in providing best-in-class services to our customers and giving our merchant partners the biggest growth opportunities. We do not believe that the current model is the best way to deliver these to our customers and merchant partners. Therefore, we intend to discontinue our pilot grocery delivery service with effect from September 17, 2021,” the email read, according to PTI.
Zomato said that its investment in grocery start-ups, Grofers, will give better results as compared to the efforts put into its in-house grocery delivery services. A Zomato spokesperson had said in a statement, “We have decided to discontinue our Kirana pilot and as of now, there are no plans to run any other type of grocery delivery on our platform. Grofers has found the high quality products market fit in 10 Minute Grocery and we are confident that our investment in the company will yield better results for our shareholders than our in-house grocery effort.
The company had so far launched its grocery service in select markets and the service venture was offering grocery delivery within 45 minutes. Zomato entered the grocery delivery market in July this year through the marketplace model. It essentially allowed customers to shop for groceries from their local stores, which were partnered with Zomato, through its platform. This differs from the business model that competition like Swiggy and Dunzo run around dedicated dark stores in key locations in a select city, allowing them to deliver groceries to their customers in 15 to 30-minute intervals. gives.
However, it should be noted that Grofers, in which Zomato holds a 10 per cent stake, had promised 10-minute delivery. A fact which Zomato believes will bear more fruit in the long run as per the statement.
Zomato said in an email, “Store catalogs are very dynamic and inventory levels change frequently. This has resulted in reduced order fulfillment, leading to a poor customer experience.”
The email said that, over the same time period, the express delivery model, with promises of less than 15-minute deliveries and near-perfect fulfillment rates, is gaining a lot of traction with customers. The company said that these services are expanding rapidly. Hence, it was felt that it would be extremely difficult to deliver delivery promises of such caliber as per Money Control, while trying to meet consistently high fulfillment rates with a marketplace model like theirs (Zomato).
“We have realized that in a marketplace model (like ours) with consistently high fulfillment rates it is extremely difficult to deliver on such delivery promises,” read the email as reported by PTI.
The company initially jumped into this service delivery space at a time when the Covid-19 pandemic was at its peak and grocery deliveries were in high demand. Delivery services like Dunzo, Swiggy and Grofers are among the pack leaders for grocery delivery at the doorsteps of the customers.
It should also be noted that this was not the company’s first foray into the grocery delivery business. Last year, when food delivery saw its initial peak due to the pandemic, Zomato actually tried its hand at the endeavour. However, it exited the segment early as the core business was also facing challenges.
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