Indian online food delivery platform Zomato has decided to cancel its grocery delivery service from 17 September.
The company cited order fulfilment gaps and poor customer experience as the reasons for its decision.
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.”
This is the second time Zomato has exited the grocery delivery segment.
The platform first started offering grocery deliveries during India’s national lockdown last April, but later discontinued the business.
In July, Zomato re-entered the segment by piloting its 45-minute grocery delivery service in some markets in the country.
The company has not shared any further details of the development.
The announcement comes a few days after Zomato secured approval from the Competition Commission of India (CCI) for a proposed investment in online grocery delivery service provider Grofers India.
The company expects its $100m investment in Grofers to be more profitable for its shareholders compared to in-house grocery efforts.
A company 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 ten-minute grocery and we believe our investment in the company will generate better outcomes for our shareholders than our in-house grocery effort.”
In a separate development, Zomato has decided to close its nutraceutical business, which it launched last year.
The Indian government is currently trying to be stricter on private label norms for marketplace businesses in the country.