Restaurant discovery and food ordering app Zomato on Monday announced the shutdown of its online ordering service in four cities — Lucknow, Kochi, Indore and Coimbatore.
Stating that it faced challenges in scaling up volumes in these cities, Gurgaon-based Zomato said these smaller cities were not yet ready for the online food ordering business. Despite its recent marketing efforts, it did not see a significant increase in order volumes in these cities, it added.
In a statement, Pankaj Chaddah, Co-Founder, Zomato, said, “We are shutting down the ordering business in Lucknow, Kochi, Indore, and Coimbatore. The size of the market in these cities is small right now and is growing with time. We will re-launch when the time is right.”
The company said the combined order volume in these four cities accounted for less than 2 per cent of its total order volumes. At a time when the food technology space seems to be facing challenges, the company claimed that its overall online order volume was growing at 40 per cent month-on-month and less than 5 per cent of its orders were discounted. Zomato launched its online food ordering business in April 2015, and had since expanded its services to 14 cities. It claims to have 75,000 restaurants listed on its platform in India.
Consumers can use the online ordering feature to order from 12,000 of these restaurants, it said, adding that it works with delivery partners Grab and Delhivery.
The Zomato move comes a week after e-commerce grocery delivery service provider, Grofers, too, decided to shut operations in nine cities, citing slower pace of growth in small towns.