Online food delivery platform Zomato has announced that it will stop the in-house grocery delivery service from September 17. This is the second time in two years that the company has abandoned the service.
In an email to grocery partners, Zomato said there were gaps in order fulfilment, leading to poor customer service. The company believes that its investment in the online grocery platform Grofers will be better for business and generate better returns for shareholders.
Zomato said it will end its pilot grocery delivery project as it feels the current model is not offering the best service to customers.
“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,” Zomato said.
Zomato mentioned that it was struggling to fulfil the under 15-minute delivery promise due to dynamic store catalogues and frequently change in inventory levels, leading to poor customer service.
“Over the last 2 months of operations, we have had a few important realisations. Store catalogues are very dynamic and inventory levels change frequently. This has led to gaps in order fulfilment, leading to poor customer experience,” the company said.
“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 said.
Zomato had first decided to enter the online grocery delivery segment in April 2020 during the first wave of the pandemic. It recently initiated a pilot project in the Delhi-NCR area to deliver online groceries again.
However, the company seems to have taken a step back and banking on its investment in Grofers to gain traction in the online grocery delivery segment.
Zomato recently invested around $100 million in Grofers and its wholesale unit Hands on Trade Private Limited. It holds over 9 per cent stake each in Grofers and Hands on Trade.
This content was originally published here.