Zomato has shut down online ordering operations in 4 cities; Lucknow, Indore, Cochin and Coimbatore. The company said that the size of the market in these cities accounted for less than 2% of its order volumes thus leading it to shutdown operations.
Zomato mentions that it will relaunch in these cities in the future and will currently continue listing restaurants and offering scanned menus in these cities. As of now, it claims that its online order volume continues to grow by 40% in the rest of the cities, on a month on month basis.
The company said that its recent marketing efforts, including television ads, didn’t help pick up volumes in these cities. Interestingly, this is the same reason cited by Grofers for shutting down in 9 cities last week.
The Gurgaon-headquartered company launched a separate app for ordering food called Zomato Order in May and started online payments for the same in July. In September, the company made a strategic investment in hyperlocal delivery companies Pickingo and Grab in order to provide last mile delivery for restaurants which are dine-in only and those who do not offer deliveries.
Layoffs: In October, Zomato laid off around 300 employees, about 10% of its 3000 strong workforce, most of them from the US content teams. The employees were people who collected data from restaurants. The month before, Durga Raghunath quit Zomato as its Senior Vice President of growth, within six months of being appointed in the position.
Other developments at Zomato:
– In September, Zomato raised $60 million in a round of funding. The platform said it would use the funds to invest in its new businesses such as online ordering, table reservations, point of sales, and the whitelabel platform.
– The same month, Zomato started offering a whitelabel platform to help restaurants create their own mobile apps. The company claims that its platform can create ‘market-ready’ iOS and Android apps in less than 3 weeks.