Zomato shuts alcohol delivery business: Report

New Delhi: In an unprecedented u-turn, Zomato has moved out of the liquor delivery business which was started last year amid the nationwide lockdown introduced by the Central government. 

The food delivery major exited the business due to scalability issues and poor unit economics, according to a report by Inc42. The Gurugram-based company took the decision to shut the liquor delivery business in January 2021. 

Confirming the report, a company’s spokesperson told the media firm, “We began Zomato wines in partnership with various state governments to ensure safe and responsible delivery during the lockdown. Earlier this year, as restrictions continued to ease, and in compliance with local laws in the mentioned states, we had decided to discontinue the service.”

Authorities in Jharkhand, West Bengal and Odisha had allowed Zomato and its rival Swiggy to deliver liquor in the states to curb crowding at liquor stores. While Zomato has moved out of the business, Swiggy is still delivering liquor in a few Indian states. 

Zomato is currently gearing up for its initial public offering (IPO) which is likely to take place late in 2021. The company is currently focusing on profitability and therefore moving out of business with high cash-burn and poor unit economics. 

In addition to liquor delivery, Zomato had started grocery delivery last year. The company has also shut grocery delivery operations as well, to entirely focus on its food delivery business.