Zomato closed service in more than 200 cities

Zomato, which provides food delivery service through the app, stopped its service in some 225 cities last month. The company has provided this information in its December quarter results. Zomato has said that this decision has been made due to the low number of orders in these cities in recent quarters.

The company said in a letter sent to shareholders: “There is a slowdown in the food delivery business since October of last year. This trend is being seen across the country. Due to this, the growth in Zomato’s GOV in the third quarter was just 0.7 percent. However, there has been 21 percent growth in GOV on a year-over-year basis.” GOV is the total value of all discounts excluding tax, customer shipping, and tip. This value was Rs 6,680 crore in the company’s December quarter.

Earlier this month, Zomato reported results for the October-December period that its consolidated revenue rose by almost 75 per cent to Rs 1,948 crore. However, the company’s loss was widened to Rs 346 crore. This includes figures from the company’s Blinkit and Hyperpure units. The company’s adjusted revenue for food delivery grew nearly 30 percent in the December quarter year-over-year. However, it has decreased year after year.

At the end of last year, last month, the e-commerce company Amazon decided to stop its food delivery in the country. The company was facing stiff competition from Swiggy and Zomato in this business. Previously, Amazon had also closed its EdTech unit. The company had informed its restaurant partners that it would discontinue service effective December 29. This unit of the company is called Amazon Food. Restaurant partners were assured to settle payments and other contractual obligations by December 29. The letter sent by the company said that restaurant partners will continue to have access to the company’s tools and reports until the end of January. To compete with Swiggy and Zomato in the country, Amazon Food was started in Bengaluru and later expanded.