Zomato discontinues Intercity Legends service due to poor performance
Zomato, the popular food delivery platform, has announced the immediate discontinuation of its Intercity Legends service. The service, launched in 2022, was designed to deliver iconic dishes from 10 different Indian cities across the country. The decision to shut down Intercity Legends comes after a temporary suspension and subsequent relaunch with modifications aimed at boosting profitability. However, despite the efforts, it failed to achieve a satisfactory product-market fit.
Zomato CEO confirms closure of Intercity Legends
Deepinder Goyal, co-founder and group CEO of Zomato, confirmed the closure of Intercity Legends in a post on X. He stated, "After two years of trying and not finding product-market fit (PMF), we have decided to shut down the service with immediate effect." This announcement marks the end of Zomato's ambitious project to bring regional delicacies to a wider audience.
Profitability challenges and operational changes
The discontinuation of Intercity Legends comes as Zomato is expanding into other sectors to increase revenue and strengthen its market position. Initially, the service had no minimum order value but later introduced a threshold of ₹5,000 to improve profitability. Despite these changes, the project did not prove financially viable for Zomato. This marks another instance where a pilot service from the company has been discontinued due to underperformance. The Gurugram-based company previously discontinued Xtreme — a logistics service.
Take a look at Goyal's post
Strategic shift and acquisition of Paytm's entertainment business
Despite the closure of Intercity Legends, Zomato continues to invest in other divisions. Earlier this week, the company acquired Paytm's entertainment and ticketing business for ₹2,048 crore in an all-cash deal. This move is part of Zomato's strategy to extend its reach in the 'going-out' segment while Paytm aims to concentrate on its core financial services offerings.
Financial performance and future prospects
Zomato's net profit rose to ₹253 crore in the three months through June, from ₹2 crore a year ago, driven by higher gross order value across its food delivery, quick commerce, and going-out verticals. The company reported consolidated quarterly revenue of ₹4,442 crore for the April-June period. Despite the discontinuation of Intercity Legends service, Zomato continues to explore new avenues for growth and diversification in its business operations.
