Launched in 2022, Intercity Legends aimed to bridge the gastronomic gap between India’s various regions. It sought to deliver iconic dishes from ten prominent cities—like Hyderabadi biryani from Hyderabad and the famous sweets of Kolkata—to customers located far from these culinary hubs. However, the initiative faced multiple launches and suspensions, with the last relaunch occurring in July. Deliveries were facilitated through air-based couriers and Zomato’s local delivery fleet.
Initially, Intercity Legends had no minimum order threshold, designed to attract a wide customer base and spark interest. The intention was to make regional delicacies available to anyone willing to pay for the premium service. Nevertheless, this strategy quickly proved to be financially untenable. The complexities of preserving and transporting food over long distances, combined with the associated high costs, undermined the service's sustainability.
Consequently, Zomato made modifications to the service, instituting a minimum order value of ₹5,000. This change was aimed at reducing financial losses by ensuring that each transaction would cover the costs of preservation and delivery. Despite this adjustment, the service continued to struggle and did not achieve its profitability goals. The logistical difficulties in maintaining food quality over long distances, along with the elevated operational costs, remained significant challenges.
Deepinder Goyal, Zomato’s co-founder and group CEO, announced the decision to close Intercity Legends via a tweet on X (formerly Twitter). “After two years of trying and not finding product-market fit, we have decided to shut down the service with immediate effect,” his tweet stated.
This closure coincides with Zomato's ongoing efforts to diversify into related sectors. The company recently disclosed its acquisition of Paytm’s entertainment and ticketing divisions for ₹2,048 crore. This acquisition encompasses Orbgen Technologies Pvt Ltd and Wasteland Entertainment Pvt Ltd, operators of the TicketNew and Insider platforms, respectively. By acquiring Paytm’s ticketing business, Zomato is strategically positioning itself to tap into the rising demand for entertainment and event booking services. Additionally, the forthcoming launch of a new app, ‘District,’ is expected to integrate these ticketing services, offering users a unified platform for booking movies, live events, and more.
For the quarter ending June 2024, Zomato reported a net profit of ₹253 crore, a substantial increase from the ₹2 crore profit recorded in the same quarter the previous year. This growth was fueled by strong performance in its core food delivery and quick commerce sectors. Zomato’s quick commerce branch, Blinkit, experienced a remarkable 130% rise in gross order value, while the food delivery segment saw a 27% increase. However, Zomato’s food delivery business also encountered a slight decline in its contribution margin, decreasing to 7.3% from 7.5% in the preceding quarter.
