IPO-bound Zomato says it'll launch grocery delivery on its app soon

Zomato will introduce a grocery section on its app and confirmed its investment in Grofers.

Zomato will introduce a grocery section on its app, it said on Thursday, and confirmed its investment in Grofers. 

While announcing its initial public offering on Thursday, Zomato confirmed the investment. "Grocery is a large opportunity, and it is in the nascent stage right now, but growing rapidly...So, I think we are actively experimenting in the space, and recently invested $100 million for a minority stake in Grofers, with the idea of getting more exposure to that space and building our own strategies," chief financial officer Akshant Goyal said at a virtual press briefing to launch Zomato's IPO. 

The firm did not say when this feature would be rolled out. 

"We will invest in new products, technologies and features for the benefit of our customers. For example, we are in the process of rolling out a grocery delivery marketplace on our platform on a pilot basis. We plan to continue to innovate to offer higher personalization and new experiences to our customers," the company said in its Red Herring Prospectus.

It was reported at the end of June that Zomato has reached an agreement to invest $100 million in online grocery firm Grofers for about a 10 per cent stake. 

Last year, as the country went into pandemic-related lockdowns, Zomato dabbled in grocery delivery for a while but exited as its core business-restaurant food delivery- recovered. 

Alleging “anti-competitive practices” by Zomato and Swiggy, restaurant industry body National Restaurant Association of India (NRAI) on Monday said it has approached fair trade regulator Competition Commission of India (CCI) for a detailed probe against the food aggregators.

Addressing a question on the issue, Zomato executives said they would work with the industry body to resolve issues. 

"Our Board has, pursuant to a resolution dated June 21, 2021, approved the incorporation of a wholly owned subsidiary of the Company, for the purposes of applying for a payment aggregator authorisation in order to continue such operations as per the RBI Guidelines on Regulation of Payment Aggregators and Payment Gateways dated March 17, 2020 and directives issued thereunder," the company said in its Red Herring Prospectus. 

Zomato, however, clarified that it has no plans to start a new payments business, and this was an RBI mandate for payments occurring on the platform.