Zomato has now decided to suspend its hyperlocal logistics service ‘Xtreme’ due to insufficient demand. This decision is part of Zomato’s ongoing strategy to experiment with and refine its service offerings. The company has also relaunched its intercity food delivery service, ‘Legends’, with significant changes aimed at enhancing the customer experience.
Not so long ago, Zomato had introduced Xtreme in October last year, intending to revolutionize the intra-city delivery market and aiming to utilise its large intra-city delivery fleet across India. The service was rolled out in nearly all of the 750-800 cities where Zomato operates, targeting both small and large merchants for small package deliveries. Leveraging Zomato’s extensive delivery fleet, Xtreme aimed to offer a reliable and cost-effective solution for intra-city logistics. The delivery charges started at ₹35, making it an affordable option for merchants needing to send packages within the city.
Despite this, Xtreme did not gain the expected traction. According to a company executive, “It was an experiment…a lot of restaurants do direct delivery and the company’s feedback was that restaurants wanted a similar quality of experience for direct deliveries. That was the basis on which Xtreme was rolled out. But it was always an experiment and could have swung either way.” Consequently, Zomato has removed the Xtreme app from the Google Play Store, and existing users are now informed that the service is not available in their area.
The suspension of Xtreme comes amid significant shifts in the hyperlocal delivery market. Reliance Retail-backed Dunzo has been facing operational challenges, and SoftBank-backed Ola has entered the segment with its ‘Ola Parcel’ service in Bengaluru, utilizing its electric two-wheeler fleet. This development also comes soon after Zomato expanded ‘Zomato Everyday’ to Mumbai, introduced a restaurant services hub to assist with operational requirements like hiring and FSSAI registrations, and piloted last-mile delivery services for office goers inside corporate parks. The company also launched an all-electric ‘large order fleet’ to handle large orders for up to 50 people.
While Xtreme has been discontinued, Zomato has revitalized its intercity food delivery service, ‘Legends’. Originally launched in 2022, Legends aimed to deliver food from renowned restaurants in select cities to customers across the country. However, the initial model, which involved delivering pre-stocked items from other cities, did not resonate well with customers. Diners, it appeared, valued the authenticity and freshness associated with direct deliveries from restaurants, even if it meant slightly longer wait times. In response, Zomato suspended the service in April to streamline and consolidate operations. Now, the food delivery aggregator has reverted to delivering food directly from restaurants. This change aims to ensure the freshness and quality of the food, enhancing the customer experience. A minimum order value of ₹5,000 has been set for the service, and customers can now curate orders from various restaurants nationwide within a single delivery. Currently available in Delhi-NCR and Bengaluru, Zomato plans to expand Legends to other cities soon.
