Zomato pulls the plug on grocery delivery, Nutraceutical
Zomato stock price moved in a narrow range as the company has decided to pull the plug on another business – Nutraceutical.
Food tech platform Zomato will also stop its nascent grocery delivery service due to gaps in order fulfillment, poor customer experience and increasing competition from rivals that are promising express delivery in 15 minutes.
Meanwhile, the company believes its investment in Grofers to generate better outcomes than its in-house grocery effort.
Zomato has decided to shut it at a time when the government is trying to get stricter about private label norms for marketplace businesses in the country.
Nutraceuticals are defined as any food-related product which provides medical or health benefits. This could range from food to beverages or even tablets with a claim of prevention or cure of chronic diseases. Following the onslaught of COVID-19, there has been a gradual rise in the adoption of healthy food among the average Indian.
Zomato has been on a ‘cleaning-up’ drive since the last few weeks.
Zomato which got listed last month also reported a net loss of Rs 356 crore during the quarter ended June 30, 2021, against Rs 99.8 crore during the like period of the previous financial year.
The total income of the company stood at Rs 916 crore during the quarter under review. This was a massive jump from a revenue of Rs 283.5 crore reported in the year-ago period.
Zomato stock price has a strong upside potential, however, worsening of unit economics remains a key risk.
This document is meant for the recipient only for use as intended and not for circulation. This document should not be reproduced or copied or made available to others. The information contained herein is from the public domain or sources believed to be reliable. While reasonable care has been taken to ensure that information given is at the time believed to be fair and correct and opinions based thereupon are reasonable, due to the very nature of research it cannot be warranted or represented that it is accurate or complete and it should not be relied upon as such. Also above note is not a recommendation to Buy or SELL and is only a view based on facts and figures and we will be in no way responsible for any losses incurred by anyone who uses this information to either trade or invests securities mentioned herein.