Saturday, July 20, 2024

Zomato Suspends ‘Xtreme’ Delivery Service Due to Low Demand

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Gurugram-based food delivery giant Zomato, led by Deepinder Goyal, has decided to stop its hyperlocal goods delivery service, ‘Xtreme’, because of low demand.

Launched in October last year, ‘Xtreme’ was designed to provide fast, local delivery for small packages using Zomato’s existing delivery fleet. The service was available in nearly all of the 750-800 cities where Zomato operates. Despite this wide reach, ‘Xtreme’ did not get the expected popularity, leading to its discontinuation and removal from the Google Play Store.

Purpose of ‘Xtreme’

Xtreme zomato

According to a Zomato executive, ‘Xtreme’ was always meant to be an experiment. “Many restaurants handle their own deliveries and wanted the same quality for their deliveries. That was why we started ‘Xtreme’. But it was always an experiment and could have gone either way,” the executive said. The service was introduced at a time when competitors like Reliance Retail-backed Dunzo were facing operational challenges, and Ola had launched its own hyperlocal service in Bengaluru.

Revamp of ‘Legends’ Service

In addition to ending ‘Xtreme’, Zomato has reintroduced its ‘Legends’ intercity food delivery service. This service allows customers to order food from famous restaurants in one city and have it delivered to another city. The revamped ‘Legends’ service now delivers food directly from restaurants instead of pre-stocked items. A minimum order value of Rs 5,000 has been set, and customers can curate orders from multiple restaurants across the country for a single delivery.

Challenges Faced by ‘Legends’

Deepinder Goyal Zomato

Initially launched in 2022, ‘Legends’ underwent a model change last year to deliver pre-stocked items from other cities for faster delivery times. However, this approach did not meet customer expectations, leading to its suspension in April due to low demand and legal issues. A New Delhi resident filed a case against Zomato, challenging the company’s promise of fresh deliveries from famous restaurants when it was actually delivering pre-stocked items from local warehouses. The case is still pending in court.

Expansion Plans

The new version of ‘Legends’ has been rolled out in cities like Delhi-NCR and Bengaluru, with plans to expand to other locations soon. By delivering directly from restaurants, Zomato aims to meet customer expectations better and avoid the issues faced previously. As the service expands, it will be interesting to see how well it performs in the competitive intercity food delivery market.

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