Online food delivery giant Zomato has said that it has decided to stop its grocery delivery service starting September 17, citing reasons like gaps in order fulfilment, and infrastructure gaps leading to poor customer experience in a highly competitive grocery market.
In a letter to its grocery partners, Zomato said, “Over the last 2 months of operations, we have had a few important realizations... Store catalogues are very dynamic and inventory levels change frequently. This has led to gaps in order fulfilment, leading to poor customer experience.”
“In the same period, the express delivery model with under 15-minute delivery promise and near perfect fulfilment rates, has been getting a lot of traction with customers and expanding rapidly. We have realised that it is extremely difficult to pull off such a model with high fulfilment rates consistently in a marketplace model (like ours),” Zomato added.
Zomato had entered into the e-grocery category in April last year, trying to exploit a surge in demand for online grocery deliveries during the first wave of the pandemic. In July 2021, the firm had launched this pilot project in select cities with 45-minute grocery delivery service while competitors were moving ahead with 10-15 min grocery delivery set-up.
Earlier, Zomato had invested US $ 100 million for acquiring a minority stake in Grofers and will now focus more on growth in this platform, for better returns.
Furthermore, after shutting its grocery delivery service, Zomato has pulled the plug on its nutraceutical business too. It had ventured into this business last year with the launch of health and fitness products.