Zomato to stop grocery delivery service from September 17

Foodtech company Zomato has decided to stop its grocery delivery service from September 17 due to gaps in order fulfillment, leading to poor customer experience. The company said that it believes that its investment in Grofers will generate better outcomes for its shareholders than in-house grocery efforts.

In an email to its grocery partners on September 11, 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 September 17, 2021". The email mentioned that "store catalogues are very dynamic and inventory levels change frequently. This has led to gaps in order fulfillment, leading to the poor customer experience".

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."

Earlier Zomato had said that it had invested US $100 million (around Rs 745 crore) for acquiring a minority stake in grocery delivery platform Grofers. In July Zomato CFO Akshant Goyal had said , "It (grocery) is a large opportunity. The online grocery is nascent right now but is growing rapidly not just in India but across the world..."

Zomato had launched the pilot grocery delivery service in July in select markets offering grocery delivery within 45 minutes to its customers.