Zomato may shut down grocery vertical Zomato Market

Zomato an Indian restaurant aggregator and food delivery start-up founded by Deepinder Goyal and Pankaj Chaddah in 2008 has come up with new news to shut down its newly launched grocery delivery service, Zomato Market according to two close sources who claim to be aware of the development.

The news of it was very unexpected as the foodtech unicorn was planning to expand its business towards the grocery segment.

The company plans to shut down its Grocery business and it can be understood as the company goes on pulling down its business in many cities, especially smaller ones,” the news came from one of the sources. The decision seems to come when the company focussed on targeting in its core business rather than an expansion to other areas.

With the launch of the grocery business, it was expected to be in competition with Swiggy who is carrying out its grocery business for the last 12 months, not only that grocery business was the company’s strategy to make up for its losses which it had to bear due to lockdown.

Zomato and Swiggy did not stop with their grocery business but they also have also started home delivery of alcohol in selected states. According to the data released, both food delivery platforms have been facing a 70-80% drop in the number of orders over two months.

Responding to the queries, Zomato said, “Zomato Market will continue to operate and service users who need on-demand delivery of essentials. However, as the country opens up basis Unlock 1.0 relaxations, we are going to spend a large proportion of our time making our food delivery service the safest, and the most loved one in town.”

Talks relating to the Merger between Zomato and Grofers were hot in town but no details relating to it have been out on the media. The Lockdown in the nation has disrupted the company’s business owing to which the company had to lay off 13% of its employees this year the company need to focus on its core business line to make things come back on the track.

Coming to the grocery segment Zomato is a new entrant following Zomato, Meesho, and Cure.fit has also started delivering grocery but most of the start-ups who entered this segment are likely to withdraw as the lockdown relaxes in the nation.