Zomato News: Zomato has reportedly widened losses in its latest financial report. The company has also announced that it has ceased operations in 225 smaller cities, as their performance was deemed “not very encouraging”. Zomato’s loss for the quarter ended December widened to Rs 346.6 crore due to a reduction in food delivery business, which was described as an “unexpected slowdown in demand”.
Zomato has not revealed which cities are affected by the move. The company said that “the performance of these cities has not been very good in the last few quarters” and the payback period on its investment in these cities was not acceptable.
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As per the latest report, Zomato has seen a revenue growth of 75 percent to Rs 1948 crore in the October and December quarter. However, the losses have also increased fivefold. Furthermore, the report claims that these 225 smaller cities account for only 0.3 percent of gross order value.
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In an effort to boost profits, Zomato recently relaunched its Gold membership in India. The company said that more than 9 lakh members have joined the program so far and it expects this to drive loyalty and increase the frequency of ordering.
At a time when many companies are cutting costs and laying off employees, Zomato CEO Deepinder Goyal has announced that the company is looking to recruit for around 800 roles. Goyal posted job vacancies on LinkedIn for a range of positions, ranging from chief of staff to CEO, generalist, growth manager, product owner and software development engineer.
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questions to ask
Why did Zomato’s loss increase in Q3?
The increased losses were mainly due to reduction in food delivery business and forfeiture of 225 small towns as their performance was not “very encouraging”.
What was the impact of shutting down operations in smaller cities on Zomato’s financial health?
The stoppage of operations in these cities resulted in a loss of Rs 346.6 crore in the quarter ended December.