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Zomato abandons plans to enter grocery delivery market after trial runs fall flat

With Zomato deciding to pull the plug on its grocery delivery pilot, it has pinned all hopes of competing in the market on Grofers.

Zomato’s grocery segment will cease operations from September 17 as per an email sent by the company to its grocery partners, Moneycontrol reported. The reasons cited by the company were gaps in order fulfillment, poor customer experience and increasing competition from rivals promising express delivery, the report added.  "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 stores and we believe our investment in the company will generate better outcomes for our shareholders than our in-house grocery effort," a Zomato Spokesperson informed MediaNama while confirming the development.   Zomato bought a 9.3 percent minority stake in Grofers in August this year.  This is not the first time that Zomato has experimented with grocery delivery. It commenced a trial run in April last year as food orders surged due to the pandemic. The trial, however, came to an end within a few months. The recent July foray was Zomato’s second attempt at propping up a grocery delivery service. The company followed a marketplace model where its customers could shop from their neighbourhood stores.  Zomato has been focusing on streamlining its business ever since it went public*. Zomato’s exit is an indicator that the firm is looking to consolidate its business and focus on offerings in which it can command a lion’s share.  Zomato's nutraceutical business also closes down Zomato’s shuttering of its nutraceutical…

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I cover several beats such as Crypto, Telecom, and OTT at MediaNama. I can be found loitering at my local theatre when I am off work consuming movies by the dozen.

MediaNama’s mission is to help build a digital ecosystem which is open, fair, global and competitive.

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