 "Zomato stock price zooms 4% on shutting down intercity 'Legends' services")
Zomato in focus: Shares of food aggregator Zomato were buzzing in trade on Friday, August 23, 2024. The shares rose up to 3.70 per cent to hit an intraday high of Rs 267.35 per share.
The surge came after the Zomato chief executive officer Deepinder Goyal said that they have discontinued their intercity food delivery service “Legends” as it could not find product market fit.
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“Update on Zomato Legends — after two years of trying, not finding product market fit, we have decided to shut down the service with immediate effect,” Goyal said in a post on social media platform X.
In August 2022, Zomato launched its intercity food delivery service to bring culinary delights from ten cities in India directly to consumers' homes. However, the initiative faced immediate challenges.
By November 2022, Siddharth Jhawar, who was leading the intercity delivery project, resigned. Zomato quietly discontinued the Legends service by April 2023, only to relaunch it in July with new strategies. This time, the company implemented a minimum order value of Rs 5,000 and opted to deliver pre-stocked food items rather than sourcing directly from restaurants. This revised service is now available to select customers in major cities like Delhi NCR, Bengaluru, and Mumbai.
Additionally, last month Zomato shut down its hyperlocal delivery service, "Xtreme," launched in October 2023. Xtreme, which enabled merchants to send and receive small parcels, did not meet performance expectations.
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Earlier this week, One 97 Communications, the parent company of Paytm, announced a major deal to sell its entertainment ticketing business—covering movies, sports, and live performances—to Zomato. This transaction is valued at Rs 2,048 crore.
Founded in 2010, Zomato Limited is a major player in the online food service industry, offering services such as food delivery, dining-out options, and loyalty programmes.
The market capitalisation of Zomato is Rs 2,34,935.52 crore, according to Bombay Stock Exchange (BSE).
The 52-week high of the Zomato stock is Rs 280 while its 52-week low is Rs 90.08 per share.
At 10:08 AM, shares of Zomato were trading 3.14 per cent higher at Rs 265.90 per share. In comparison, BSE Sensex was trading 0.03 per cent higher at 81,078.14 levels.