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Zomato is using every trick in the book to stay relevant

Shikhar Tripathi by Shikhar Tripathi
24 January 2023
in Business
Zomato Instant
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Zomato Instant service: This is a classic example of the saying, “You reap what you sow.” The companies (Swiggy or Zomato) should have been more prudent in their strategy and invested in long-term strategies rather than short-term gains. Now, they have to bear the consequences of their own actions.

This situation is a result of their own actions. Both companies have been offering huge discounts and cashbacks for a long time. They have been trying to capture market share by heavily investing in discounts and promotions. This strategy has now come back to haunt them, as they are bearing huge losses due to it.

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Zomato is going to shut down its 10-minute food delivery service. The name of this service from Zomato was Zomato Instant. Not even a year has passed since the launch of this service. The company has informed its partners about discontinuing this service. Earlier, the company also discontinued its Pro service.

Zomato Instant

Zomato stated that it is working on improving the service, Zomato Instant, and rebranding it to better reflect its core mission and values. The company said that the improvements will make the service more user-friendly and accessible to customers. It also said that the rebranding process will take a few months and that the service will be back up and running soon.

“Instant is not shutting down. We are working on a new menu with our partners and rebranding the business. All finishing stations remain intact, and no people are impacted by this decision,” said a Zomato spokesperson.

Deepinder Goyal, CEO of Zomato, said, “Nobody in the world has so far delivered hot and fresh food in under 10 minutes at scale, and we were eager to be the first to create this category, globally.”

Also Read: How a 10-Minute Marketing Gimmick Boomeranged for Zomato

Chain of Mistakes

Zomato was the first app to allow people to discover restaurants and rate their food. However, as other food delivery companies such as Food Panda, Tiny Owl, and others began to emerge, Zomato decided to follow suit and also offer food delivery services at competitive prices.

However, the company has faced financial challenges since then due to intense competition in the food delivery market. Additionally, the COVID-19 pandemic has greatly affected the food and restaurant industries, which has negatively impacted Zomato’s business.

Afterwards, they acquired Blinkit for grocery delivery, which also did not prove to be a profitable business for them. They claim to be rebranding Zomato Instant, but the succession of events makes it hard to believe that these steps are not negatively impacting their business and market position.

If we look at the initial public offering (IPO) price of the shares of this company, it was 72 to 76 Indian rupees (INR) per share at the time of launch in 2021. However, their current price is hovering between 50 and 55 INR per share.

Also Read: The Zomato-Blinkit merger: A lose-lose situation

It is evident that, on account of unplanned acquisitions, financial mismanagement, and predatory market practices, Zomato is incurring heavy losses and failing to maintain its top position in the food delivery market. In a couple of years, we will know if the company’s decisions have been beneficial or detrimental. We wish them the best of luck.

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