Food ordering app Zomato shut down in 4 cities in India

Food ordering app Zomato to shut down in 4 major cities in India because of the low volume.

Zomato closed down in 4 cities
Zomato closed down in 4 cities

In the digital age with world’s 2nd largest populated country, Gurgaon-based food ordering app Zomato is shutting down its online ordering service
in Lucknow (capital of Uttar Pradesh), Kochi, Indore, and Coimbatore as it didn’t receive a sustainable increase in the order volumes in these cities.

Zomato had launched its food ordering business in April 2015, allowing customers to order food online from restaurants using its app, and operations in 14 cities across India.

However it is shutting down online business in 4 cities because of the limited market size at the moment despite Zomato’s marketing efforts, including television ads.

The combined order volume in these 4 cities accounted for less than 2% of Zomato’s total order volumes.

Indian food technology sector is finding itself in the midst of a major restructuring just like other online ventures, resulting in hundreds of job cuts. Foodpanda India also laid off 300 people. Bengaluru-based SpoonJoy, which raised $1 million in May also shut down its Delhi operations.

This raise the serious question if Indian food market is ready for online business apart from exaggerated valuation. Similarly Chennai-based OrderSnack closed even before raising their first round of funding.