Zomato shuts down operations in four cities

Company said combined order volume in the four cities accounted for less than 2% of its total order volumes

Food ordering app company Zomato announced on Monday it will be shutting down its online ordering service in Lucknow, Kochi, Indore, and Coimbatore, as the size of the markets are small in these cities now.

However, the company said there would be no job cuts due to the development.

"We are shutting down the ordering business in Lucknow, Kochi, Indore, and Coimbatore. The size of the market is in these cities is small right now and is growing with time. We will re-launch when the time is right," co-founder Pankaj Chaddah said in a statement.

"There will be no job cuts with this business move. We will be realigning people into other sales verticals," a company spokesperson told PTI.

Zomato launched its online food ordering business in April 2015, which allows its users to order food online from restaurants using its app, and had since expanded this offering to 14 cities across India.

The company said despite its recent marketing efforts, including television ads, it didn't see a significant increase in the order volumes in these few cities.

"These smaller cities are not yet entirely ready for the online food ordering business, but once they are, Zomato will reconsider its strategy," it added.

It said the combined order volume in these four cities accounted for less than 2% of its total order volumes. Overall, Zomato's online order volume is growing at 40% month-on-month.