Zomato will be shutting down its online ordering service in Lucknow, Kochi, Indore, and Coimbatore.
Gurgaon based Zomato which launched its online food ordering business in April 2015, had since expanded this offering to 14 cities across India.
Pankaj Chaddah, Co-Founder, Zomato, said, “We are shutting down the ordering business in Lucknow, Kochi, Indore, and Coimbatore. The size of the market is in these cities is small right now and is growing with time. We will re-launch when the time is right. In the meanwhile, we will continue to offer the best content (including scanned menus) to ensure that foodies are able to find and order great food.”
The company in a statement said, the combined order volume in these 4 cities accounted for less than 2% of Zomato’s total order volumes. Overall, Zomato’s online order volume is growing at a healthy 40% month-on-month. Less than 5% of Zomato’s orders are discounted, making Zomato one of the few tech startups to not use negative gross margins to grow the business.
Recently, Grofers shutdown its online ordering service in 9 cities citing the same reason.
Zomato which has 75,000 restaurants listed on its platform in India works with delivery partners Grab and Delhivery to offer delivery from restaurants which do not otherwise deliver food.
Recently, an online petition was started which asked Zomato to ensure background checks for the delivery teams.