Last Updated on 22/11/2021 by Riya
The meal delivery app Zomato confirmed in a press conference yesterday that it plans to launch an online grocery delivery service. Although this is not a new business for Zomato, the company previously offered a grocery delivery service to provide groceries to those in need during a lockdown, but the service was later discontinued. Despite this Zomato plans to return to the grocery sector after a year. This announcement occurs when a company prepares to undertake its first public offering (IPO), which will begin on July 14. Zomato intends to collect Rs. 9,375 crores via an initial public offering.
The grocery service will be available solely through the Zomato app, as it was last year. Zomato, on the other hand, has not confirmed whether it has partnered with local Kirana stores to supply groceries to its users or not. Zomato isn’t the first company to join the grocery delivery sector; Swiggy also launched an online grocery store last year. In addition to Swiggy, the Tata Group and Reliance Jio have also announced plans to enter the grocery store business in the coming years. With this new launch, Zomato’s challenges have increased, as they now have to compete with tech giants like Amazon and Flipkart, both of whom are trying constantly to expand their grocery delivery services across the country.
The rumors of Zomato’s expansion in the grocery sector were roaming around since the month when Zomato purchased $100 million stakes in Groffers. However, Zomato CFO Akshant Goyal put a stop to all the rumors by saying that funding in Grofers has no connection with the plan to launch the grocery delivery service.
The grocery business has attracted many companies during COVID-19 when due to the lockdown several businesses shutdowns, at that time only online grocery business was running successfully, due to this several big companies decided to enter into this business to earn profit. A study by consulting agency RedSeer suggested that the Indian online grocery market will reach $24 gross sales by 2025.