Zomato had launched a pilot grocery delivery service in July this year offering grocery delivery within 45 minutes to its customers in select markets.
Online food delivery platform Zomato has decided to shut down its grocery delivery service from September 17.
The company also said that it believes its investment in Grofers will yield better results for its shareholders than its in-house grocery efforts.
In an email to its grocery partners, Zomato said, “At Zomato, we believe in providing best-in-class services to our customers and the greatest growth opportunities to our merchant partners. We don’t believe the current model can deliver. The best way. These are for our customers and merchant partners. Hence, we intend to discontinue our pilot grocery delivery service from 17th September 2021.”
The email mentions that “store catalogs are very dynamic and inventory levels change frequently. This has led to lag in order fulfillment, which has worsened the customer experience”.
Over the same time period, the express delivery model, with 15-minute delivery promises and near-perfect fulfillment rates, is gaining a lot of traction with customers and is expanding rapidly, the company said in an email.
“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,” Mail said.
When contacted, a Zomato spokesperson said, “We have decided to discontinue our grocery pilot and as of now, have no plans to run any other type of grocery delivery on our platform. Grofers has decided to launch high quality grocery deliveries. Have found the product-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.”
Earlier Zoamto said it had invested USD 100 million (about Rs 745 crore) to acquire a minority stake in grocery delivery platform Grofers.
In July Zomato CFO Akshat Goyal had said, “It (grocery) is a huge opportunity. Online grocery is still nascent but growing rapidly not only in India but across the world…
“We are actively experimenting with that space and have recently invested $100 million for a minority stake in Grofers, to gain more exposure to that space and build our strategies and plans around that business. with thought”.
Zomato had launched a pilot grocery delivery service in July this year offering grocery delivery within 45 minutes to its customers in select markets.
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