Deepinder Goyal-led Zomato suspends 'Xtreme' hyperlocal delivery service; Here's why

Gurugram-based food delivery giant Zomato has decided to suspend its hyperlocal goods delivery service, 'Xtreme,' due to low demand.

Launched in October last year, 'Xtreme' aimed to offer intracity delivery for small packages using Zomato’s existing delivery fleet.

The service was available in nearly all of the 750-800 cities where Zomato operates. Despite these efforts, 'Xtreme' failed to gain the expected traction, leading to its discontinuation and removal from the Google Play Store.

Why did Zomato launch 'Xtreme'?

According to a Zomato executive, 'Xtreme' was always intended as an experimental service. "A lot of restaurants do direct delivery, and they wanted the same quality for their deliveries. That was why we started 'Xtreme'. But it was always an experiment and could have gone either way," said the executive.

The initiative came at a time when competitors like Reliance Retail-backed Dunzo were facing operational challenges, and Ola had launched its own hyperlocal service in Bengaluru.

How has Zomato revamped the 'Legends' intercity food delivery service?

Alongside discontinuing 'Xtreme,' Zomato has reintroduced its 'Legends' intercity food delivery service. This service allows customers to order food from renowned restaurants in one city and have it delivered to another city.

The revamped 'Legends' service now delivers food directly from restaurants rather than pre-stocked items.

Additionally, a minimum order value of Rs 5,000 has been instituted. Customers can also curate orders from multiple restaurants across the country for a single delivery.

What challenges did 'Legends' face previously?

Originally launched in 2022, 'Legends' underwent a model tweak last year to deliver pre-stocked items from other cities for quicker delivery times. However, this approach did not meet customer expectations, leading to its suspension in April due to low demand and legal issues.

A New Delhi resident filed a case against Zomato, challenging the company's promise of fresh deliveries from renowned restaurants when it was actually delivering pre-stocked items from local warehouses. The case is still pending in court.

Expanding 'Legends' to other cities

The new version of 'Legends' has been rolled out in cities such as Delhi-NCR and Bengaluru, with plans to expand to other locations soon. By delivering directly from restaurants, Zomato aims to meet customer expectations better and avoid the issues faced previously. As the service expands, it will be interesting to see how well it performs in the competitive intercity food delivery market.