The online food delivery major, Zomato has decided to shut down its grocery delivery service for the second time amidst the growing competition in the segment.
The company stated that its investment in e-grocer Grofers which will generate better outcomes than its in-house grocery effort.
The giant has informed through a mail to its grocery partners that it plans to shut its pilot service with effect from September 17.
A spokesperson from Zomato said, "We have decided to shut down our grocery pilot and as of now, have no plans to run any other form of grocery delivery on our platform."
The spokesperson said that Grofers has found high quality product market that fits in 10 minute grocery and added, "we believe our investment in the company will generate better outcomes for our shareholders than our in-house grocery effort."
The food tech firm lately listed its grocery service pilot that offers delivery within 45 minutes to its customers.
The proposed acquisition by Zomato of 9.3 percent equity stake in e-grocer Grofers, has been approved by the Competition Commission of India (CCI) last month.
The acquisition involves an investment of USD 100 million by the food major firm in the online grocer.
The online food delivery brand had witnessed a bumper IPO in July, and has reported a significant loss in the Q1 of the current fiscal year.
The firm had reported a net loss of USD 48 million in the June quarter, that is from nearly USD 13.5 million in the same period last year.