Zomato Deactivates Its ‘Legends’ Service That Operates Between Cities

Nitin Konde, Apoorva Bajj

Aug 26, 2024 — 3 min read

Zomato Deactivates Its ‘Legends’ Service That Operates Between Cities

Intercity Legends, a Zomato service that brought famous food items from 10 Indian towns to customers all throughout the nation, will be shutting operations immediately. The service was momentarily halted and then reinstated in July with some adjustments to make orders more viable, but now it has been stopped.

According to a tweet by Zomato CEO Deepinder Goyal on social media site X (formerly Twitter), the company has chosen to immediately terminate the Zomato Legends service after two years of testing and failing to achieve product market fit.

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.
— Deepinder Goyal (@deepigoyal) August 22, 2024

It Is Not the First Time That Firm Opted for Shutdown

At a time when Zomato is branching into a variety of other competing sectors in order to increase revenue and consolidate its position in the market, Intercity Legends has been shut down. In the beginning, when Intercity Legends was first released in 2022, there was no minimum order threshold. However, in order to increase profitability, a minimum order value of INR 5,000 was implemented. Zomato determined that the initiative did not make any sense from a financial standpoint.

This is yet another service that Zomato has terminated; in the past, the company has also terminated previous trial programmes. The logistics service known as Xtreme, which was situated in Gurugram and enabled merchants to send and receive small packages, was cancelled by the corporation since it did not produce the results that were desired.

Zomato Legends at the Time of Launch

At the time when the intercity service was initially introduced, the corporation had a positive outlook on the offering. It is said that a jewel can be found in every nook and cranny of India.

"The sky is the limit to how big Intercity Legends can become," the business had stated in a blog. "With over a hundred airports and a rich spread of the most iconic dishes that India has to offer, the number of possibilities is virtually limitless."

In the meantime, Zomato is devoting resources and attention to other areas of the company. The meal delivery giant Zomato announced on August 21 that it will purchase Paytm's entertainment and ticketing business for a total of INR 2,048 crore in an all-cash transaction. This comes as the food delivery giant hopes to grow its footprint in the 'going-out' market, while the troubled fintech major seeks to concentrate on its core financial services offerings with the acquisition.

Zomato on the Financial Front

In terms of revenue, Zomato has grown substantially. In the first quarter of the fiscal year 2024-25 (Q1FY25), the company's consolidated profit increased significantly from the previous quarter's INR 175 crore to INR 253 crore. Zomato achieved its first ever profit in the same period last year (Q1FY24), albeit a small one of INR 2 crore.

Zomato's operational revenue also increased significantly, increasing from INR 2,416 crore in Q1FY24 to INR 4,206 crore in Q1FY25, a 74% year-on-year rise. The prior quarter's reported revenue for the company was INR 3,562 crore. Although revenue increased to INR 3,636 crore in Q1FY24 and INR 2,612 crore in Q1FY24, overall expenditures increased to INR 4,203 crore in Q1FY25.