Zomato Discontinues Inter-City Food Delivery Service After Two-Year Trial
Zomato ends its Intercity Legends service due to lack of market fit. The move follows the company's recent acquisition of Paytm's ticketing businesses, highlighting Zomato's strategic shifts in the food-tech industry.
Deepinder Goyal, CEO of Zomato, announced the discontinuation of the company's inter-city food delivery service, Intercity Legends, on August 22, 2024. The service, which allowed users to order food from different cities within India, was launched in 2022 but failed to achieve the desired market fit after a two-year trial period.
This decision comes on the heels of Zomato's recent acquisition of Paytm's movie and events ticketing businesses for $244.2 million, announced just a day prior. The move indicates a strategic shift in the company's focus and resource allocation.
Zomato, founded in 2008 by Deepinder Goyal and Pankaj Chaddah, has undergone significant evolution since its inception as a restaurant discovery platform called Foodiebay. The company has expanded its operations and diversified its services over the years, including:
- Intra-city food delivery
- Quick commerce division (Blinkit)
- Business-facing kitchen supplies platform (Hyperpure)
- Ticketing business
While food delivery remains Zomato's primary revenue generator, accounting for 46% of its first-quarter earnings, the company has not disclosed the specific contribution of the now-defunct Intercity Legends service.
"After two years of trying, not finding product market fit, we have decided to shut down the service."
Zomato's journey in the food-tech industry has been marked by both innovations and challenges. The company went public in 2021 with a successful IPO on Indian stock exchanges, marking a significant milestone in its growth trajectory. However, it has also faced competition from rivals like Swiggy and dealt with protests from restaurant partners over commission rates.
In its efforts to optimize operations and expand services, Zomato has explored various initiatives. These include investing in drone delivery technology, launching the Zomato Instant service for 10-minute food delivery in select cities, and experimenting with cloud kitchens. The company has also shown commitment to social responsibility through its non-profit initiative, Zomato Feeding India, which addresses food insecurity.
As Zomato continues to navigate the dynamic food-tech landscape, the decision to discontinue Intercity Legends reflects the company's adaptability and focus on sustainable growth. With its core food delivery business and new ventures in ticketing and quick commerce, Zomato aims to strengthen its position in the market while addressing evolving consumer needs.
