Zomato Intercity Legends: A Look At The Service's Bumpy Ride  

Zomato has shut down its intercity food delivery service Legends within two years of its launch. Taking to X, Zomato CEO Deepinder Goyal stated that the service was shut down due to the inability to find the right product fit.

The service sounds very interesting. Imagine feeling homesick and craving your favourite sweet dish from your hometown. You order it on Zomato and it gets delivered the next day. As interesting as it sounds, the service never really took off. Here is a a look at the service's bumpy ride  

Food Without Boundaries: Zomato Starts Legends Service 

In August 2022, Zomato launched its Intercity Legends service with the tagline ‘The love for food knows no boundaries’. Kolkata, Hyderabad, Lucknow, Jaipur, Bangalore, Mathura, Chennai, Agra, and Bhubaneswar were the list of cities from which orders could be made. Initially, only people from Delhi-NCR and Bengaluru could make the order. 

The food ordered would be delivered to the user’s location via flight. In a blog post in 2022, the food delivery platform mentioned that it was leveraging Zomato’s vast network of restaurant partners and delivery partners, deep understanding of food technology, and insights to deliver the food. 

Following this, in September 2022, the company mentioned that it would expand its Legends service to more cities. As per Mint, Siddharth Jhawar, head, Intercity Legends, Zomato, said, “We have a lot of clarity. Over the next three months, we want to be in all top cities.” 

To ensure quick delivery, the company partnered with services like ShadowFox, with customers covering packaging and logistics costs. 

Challenges arose for the company in November 2022 when Siddharth Jhawar, the vice president of Zomato and head of Legends, resigned. After Jhawar's exit, Blinkit executive Kamayani Sadhwani took over leadership of 'Intercity Legends' for Zomato, according to the Economic Times. 

Read: How Zomato-Paytm Deal Can Disrupt BookMyShow's Monopoly

Zomato was pre-stocking food items for its Legends service for immediate delivery. A source told The Economic Times that the original model, which delivered food the next day, didn't meet customer expectations as hoped. Feedback showed that it didn't satisfy immediate hunger needs, leading the company to reportedly revise the model to pre-stock popular items.

However, this approach did not work well for the company. In February this year, a plea was filed in a Delhi court by a Gurgaon resident who alleged that the food delivery platform was misleading people with claims of hot food deliveries, as per a Bar and Bench report. 

In the plea, the resident claimed that Zomato was engaged in "false and fraudulent" practices. The allegation centered on the delivery of fresh food from popular restaurants under Zomato's 'Dilli ke Legends' sub-category. 

The issue started when the user, Saurav Mall, ordered three food items from Delhi and one from Lucknow. Despite the prevailing distance, the order was reportedly delivered within thirty minutes. The case is still with the court. 

In April this year, the company suspended Legends. The service was shutdown after the platform didn’t see traction from customers for the same, as per reports.

Read: Zomato Collected Rs 83 Crore as Platform Fee from Customers till March, Says Report

Revamping Legends 

Meanwhile, in July this year, the company re-launched Legends again. However, this time the model was different. Instead of delivering pre-stocked food items, this time Legends focused on delivering the meal directly from the restaurants. 

The minimum order value for the same was Rs 5,000. The new services were rolled out in Delhi and Bengaluru with hopes for further expansion.

Eventually, the experiment failed. Goyal wrote on X, “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.” 

Experimentation On the Go 

Zomato doesn’t run out of experiments. The company recently expanded its ‘Zomato Everyday service’ in Mumbai, as per a report by Inc42. Under ‘Zomato Everyday Service’, customers get home-cooked meals for the starting price of Rs 89. The service was initially available in Delhi NCR, Bengaluru, Hyderabad, and Pune. 

In April of this year, the company also introduced a 'large order fleet' specifically for group catering. 

Goyal wrote on X, “Today, we are excited to introduce India's first large order fleet, designed to handle all your large (group/party/event) orders with ease.” 

In August this year, the company ordered a group ordering feature. One can now share a link with friends, allowing everyone to add items to the cart effortlessly, making group ordering quicker and more convenient through this feature. Zomato’s rival Swiggy also launched the same feature this month. 

The company reported a net profit of Rs 253 crore in the April-June quarter compared to Rs 2 crore net profit that was reported in the same quarter last year. Similarly, the company’s revenue grew from Rs 1,416 crore last year to Rs 4,206 crore this year. 

Now, the increased focus of the company is on its ‘going-out business’. Zomato acquired Paytm’s movie ticketing and events business for Rs 2,048 crore. Both the companies informed the stock exchanges about the acquisition on August 22. In a regulatory filing, Zomato said, “The acquisition is in line with our strategy of investing in our going-out business." 

To strengthen its foothold in this sector, Zomato plans to promote its new 'District' app. According to Goyal, the app's primary aim is to enhance customer engagement and increase demand in the going-out segment. “We want to position ‘District’ as the brand that consumers turn to when they are thinking of going out,” he added in an investor call. 

It will be interesting to see how Zomato’s ‘District’ app or any of its new features perform in the long run. The company holds certain advantages in terms of market penetration through its food delivery and quick commerce platform. Additionally, the company benefits from strong financials and a market capitalisation of Rs 2 trillion. However, it must account for the intense competition in the e-commerce sector, customer preferences, and various market factors.