After online shopping delivery, Zomato ends its nutraceutical business


MUMBAI: The Foodtech Zomato platform has closed its nutraceutical activity. This development comes hours after the company decided to end its grocery delivery business from September 17, citing fierce competition and moderate success.

In 2020, Zomato started its nutraceutical business with the launch of health and fitness products. The move comes at a time when the government is getting stricter on private label standards for market companies in the country. Last year, the online food market had harnessed the nutraceutical opportunity related to food products offering medical or health benefits, expecting it to be a significant driver of value for Zomato.

Zomato previously announced its decision to stop its grocery delivery service on September 17, mainly due to gaps in order fulfillment resulting in a poor customer experience. It had launched the pilot grocery delivery service in July this year in select markets offering grocery delivery in less than 45 minutes to its customers. The company also said it believes its investment in Grofers will generate better results for its shareholders than internal grocery efforts.

In an email to its grocery partners, the online food delivery platform said, “At Zomato, we believe in providing best-in-class service to our customers and the biggest. growth opportunities to our merchant partners. We don’t think the current model is the best way to deliver them to our customers and merchant partners. Therefore, we intend to discontinue our pilot grocery delivery service as of September 17, 2021 ”.

The email mentioned that “Store catalogs are very dynamic and stock levels change frequently. This has resulted in gaps in order fulfillment resulting in a poor customer experience.”

During the same period, the express delivery model, with a promise of delivery in less than 15 minutes and near perfect turnaround rates, garnered a lot of interest from customers and grew rapidly, added the company in the email. “We have realized that it is extremely difficult to deliver on such a delivery promise with high execution rates consistently, in a market model (like ours),” the courier said.

Zomato has invested $ 100 million (around Rs 745 crore) to acquire a minority stake in the Grofers grocery delivery platform.

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