Zomato shuts down hyperlocal delivery platform 'Xtreme' amid poor demand

Despite its strategic launch, 'Xtreme' failed to gain traction, leading Zomato to remove it from the Google Play Store

Gurugram-based food delivery giant Zomato has suspended its hyperlocal goods delivery service, ‘Xtreme’, citing insufficient demand, reported The Economic Times citing sources. 

Launched in October last year, ‘Xtreme’ aimed to revolutionise the intra city delivery market by targeting small and large merchants for small package deliveries. This service used Zomato’s extensive fleet and was rolled out across nearly all 750-800 cities where Zomato operates.

Despite the strategic launch, ‘Xtreme’ failed to gain the expected traction. As a result, Zomato has removed the ‘Xtreme’ app from the Google Play Store. When approached for comments by the news website, Zomato remained silent, but a company executive revealed, “It was an experiment. Many 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.”

Zomato’s attempt to capture the hyperlocal delivery market came at a turbulent time for competitors. Reliance Retail-backed Dunzo was grappling with operational challenges, which opened the door for SoftBank-backed Ola to enter the hyperlocal segment with its ‘Ola Parcel’ service in Bengaluru, utilising its electric two-wheeler fleet.

Revamped intercity food delivery
 

In a parallel move, Zomato has revitalised its intercity food delivery service, ‘Legends’, introducing its third iteration. ‘Legends’ enables customers to savour dishes from renowned restaurants in select cities delivered directly to their doorstep.

This new version of ‘Legends’ departs from the previous model, where pre-stocked food items were delivered. Now, food is dispatched directly from restaurants, although a minimum order value of Rs 5,000 has been instituted. 

Additionally, customers can now curate orders from multiple restaurants across the country for a single delivery. Currently available in Delhi-National Capital Region (NCR) and Bengaluru, the service is set to expand to other locations soon.

Originally launched in 2022, ‘Legends’ underwent a model tweak last year to deliver pre-stocked items, aiming for quicker delivery times. However, this approach did not resonate well with customers, prompting a suspension of intercity deliveries in April this year. Legal troubles also plagued the service, with a New Delhi resident filing a case against Zomato for misrepresentation. The case, challenging Zomato’s promise of fresh deliveries from renowned restaurants, remains pending in court.