Deepinder Goyal, founder and CEO of Zomato, has announced the shutdown of the company’s 10-minute food delivery initiatives. Amid the company faced a 78% net profit decline in Q4 results, Deepinder Goyal clarifies that India is not ready for 10 food delivery initiatives. It will compromise customer satisfaction. Let’s know the details.
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Shut Down of Zomato’s 15 Delivery Initiative.
Deepinder Goyal led Zomato, a food delivery platform, has officially closed its 15-minute food delivery initiatives, such as Quick and Everyday. They gave the reason of a lack of demand, infrastructure limitations, and no way to achieve profitability with these initiatives.
This move was announced during the Q4 results, where the company incurred a heavy loss of around 78% loss in net profits.
Though Zomato Quick and Everyday initiatives were started to tackle rivals like Zepto’s Cafe, Blinkit’s Bistro, and Swiggy’s Snacc. Zomto’s Quick services were live in select cities and permitted to pick up orders from the restaurants only to deliver within a 2km radius. Still company had to shut down within four months of its start.
Deepinder Goyal Explained the Reality.
CEO and founder of Zomato, Deepinder Goyal, explains how these quick initiatives have started to become a burden on the company. He says that ways are unavailable to turn these initiatives into profitable ones without losing customer satisfaction.
“We are actually shutting down both these initiatives as we are not seeing the path to profitability in these without compromising on customer experience, “Deepinder Goyal said as per a regulatory filing.
Goyal even admits that India lacks sufficient restaurants to run these initiatives successfully. He said, “India’s Current restaurant density and kitchen infrastructure is not set up for delivering orders in 10 minutes.”
Talking about the ‘Everyday’ feature provided in the Zomato app, he clarifies that home meals have a very limited use case. His words, “With Everyday, we realised that the need for homely meals is a limited use case largely for office locations in metros. We did not see enough ROI by keeping it running at a small scale.”
Zomato: A Bad Q4 Result With Heavy Losses.
All these steps go to Q4 results, which reported a heavy loss. Eternal, the parent company of Zomato, reported a heavy 78% loss in net profit. The profit just stood at ₹39 crore. On the other hand, revenue on a y-o-y basis grew by 64% to ₹5,833 crore, and the company’s expenses grew by 68% to ₹6,104 crore, eating into the net profit.
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