Zomato News: Zomato in its latest financial report has reportedly widened losses. The company has also announced that it has ceased operations in 225 smaller cities, as their performance was deemed not "very encouraging." Zomato's losses for the quarter ending in December reached Rs 346.6 crore due to the reduction in the food delivery business, which was described as having experienced an "unexpected slowdown in demand."
Zomato has not disclosed which cities have been affected by this move. The company stated that the "performance of these cities was not very good in the last few quarters" and the payback period on its investments in these cities was not acceptable.
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As per the latest report, Zomato has witnessed a revenue growth of 75 percent to Rs 1948 crore in the October and December quarters. However, the loss has also jumped five times. Furthermore, the report claims that these 225 small cities havehas only 0.3 percent gross order value.
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In an effort to boost profits, Zomato recently relaunched its Gold subscription in India. The company stated that the program has seen over 9 lakh members join 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 hire for around 800 roles. Goyal posted several job vacancies on LinkedIn, including Chief of Staff to CEO, Generalist, Growth Manager, Product Owner, and Software Development Engineer.
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FAQs
Why has Zomato's losses increased in Q3?
The increased losses were primarily due to the reduction in the food delivery business and operations being seized in 225 smaller cities due to their performance not being "very encouraging."
What was the impact of ceasing operations in smaller cities on Zomato's financials?
The impact of ceasing operations in these cities resulted in a loss of Rs 346.6 crore for the quarter ending in December.
