Zomato to Re-focus on Food Delivery

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Zomato is re-evaluating its expansion in the e-grocery delivery segment. Though it started aggressively by initiating its operations across 80 cities and there were rumors about Zomato being in talks to acquire or form a strategic relationship to provide an additional boost to its rapid expansion plan (Delivery War: Catching Fire). Though the e-grocery delivery looks highly synergistic to Zomato’s current business model centered around food delivery. But e-grocery delivery comes with its own added disadvantage like lack of control over inventory and low average order values. According to an article published by the Ken- Though Zomato will continue to operate and provide services for grocery delivery. But as the lockdown will be lifted, the firm will re-focusing its time and resources on its food delivery segment. It’s just not Zomato; many companies like dominoes, no-broker, Meesho, Perpule fall back on grocery delivery to keep up the drying revenue stream. As the lockdown will be lifted, and more we get accustomed to the new (ab)normal more of these players are likely to abandon the segment.

In the case of Zomato, an additional question arises that could its re-focus on food delivery be a result of the new entrant in the segment, i.e., Amazon Foods? 

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