Food tech major Zomato has decided to scrap its grocery delivery service for the second time amid growing competition in the segment.
The company is of the view that its investment in Grofers will generate better outcomes than its in-house grocery effort.
Zomato has informed its grocery partners through a mail that it plans to stop its pilot service with effect from September 17.
“We have decided to shut down our grocery pilot and as of now, have no plans to run any other form of grocery delivery on our platform,” a Zomato spokesperson said.
“Grofers has found high-quality product market fit in 10 minute grocery and we believe our investment in the company will generate better outcomes for our shareholders than our in-house grocery effort,” the spokesperson added.
The recently listed company had started its grocery service pilot in select markets offering delivery within 45 minutes to its customers.
Last month, the Competition Commission of India (CCI) approved the proposed acquisition of 9.3 per cent stake in e-grocer Grofers by Zomato.
The acquisition involves an investment of $100 million by Zomato in the online grocer.