Zomato to stop grocery delivery from today over ‘gaps in order fulfilment’

Zomato, however, has invested USD 100 million (around 745 crore) for acquiring a minority stake in Grofers, an online platform dedicated to grocery delivery.
Zomato had launched the pilot grocery delivery service in July this year in select markets offering grocery delivery within 45 minutes to its customers. (File Photo / REUTERS)
Zomato had launched the pilot grocery delivery service in July this year in select markets offering grocery delivery within 45 minutes to its customers. (File Photo / REUTERS)
Published on Sep 17, 2021 05:30 AM IST
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Written by Joydeep Bose | Edited by Meenakshi Ray, Hindustan Times, New Delhi

Zomato, the popular online food delivery platform, will stop its grocery delivery service from Friday due to “gaps in order fulfilment” which has led to a ‘poor’ customer experience. This will be Zomato's second exit from the grocery segment since last year when the company branched out with other endeavours in view of the coronavirus disease (Covid-19) pandemic.

In an email to its grocery partners earlier last Sunday the company 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.”

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Notably, Zomato launched the pilot grocery delivery service in July this year in select markets offering grocery delivery within 45 minutes to its customers.

“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 email from Zomato stated. It also mentioned that “store catalogues are very dynamic and inventory levels change frequently”, which has led to “gaps in order fulfilment, leading to poor customer experience.”

Zomato, however, has invested $100 million (around 745 crore) for acquiring a minority stake in Grofers, another online platform dedicated solely to grocery delivery. The company believes that this will actually generate better incomes for its stakeholders than in-house grocery efforts.

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“Grofers has found a 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,” a Zomato spokesperson told PTI news agency.

In July, Zomato's chief financial officer (CFO) Akshant Goyal said that the company plans to get more exposure to the online grocery business, which is in a nascent stage right now, and the acquiring of a minority stake in Grofers was aimed at experimenting with that space and building strategies around it.

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Saturday, October 23, 2021