Zomato will stop delivering groceries from September 17; Trust Grofers will produce better results

Zomato will stop delivering groceries from September 17.

Online grocery delivery platform Zomato decided to discontinue its grocery delivery service on September 17, primarily due to order processing imperfections that resulted in a poor customer experience. The company also said its investment in Grofers would provide its shareholders with a better return than the supermarkets' internal efforts. In an email to its grocery partners, 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 17 September, 2021". 

The email mentions that "store catalogues are very dynamic and inventory levels change frequently. This has led to gaps in order fulfillment, leading to poor customer experience". 
Over the same period, the express delivery model with a delivery promise of less than 15 minutes and near-perfect turnaround times has become popular with customers and has grown rapidly, the company said in the "email."
"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 mail said. 

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." 

Previously, Zoamto said it had invested $ 100 million (roughly $ 745 billion) to acquire a minority stake in Grofers' grocery delivery platform. In  July, Zomato CFO Akshant Goyal 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 "We are actively experimenting in that space and recently invested USD 100 million for a minority stake in Grofers, with the idea of getting more exposure to that space and building our strategies and plan around that business".
In July of this year, Zomato launched its test delivery service for groceries in selected markets and offers its customers 45 minutes of groceries.


Sources:- the live mint
 

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