Why Zomato Delisted 19,000 Restaurants From Its Platform - CEO Deepinder Goyal Explains

Zomato’s recent shareholder meeting shed light on the company’s slower-than-expected growth in its food delivery segment. CEO Deepinder Goyal acknowledged that November’s year-on-year (YoY) growth fell short of the 20% target the company had previously guided, but he assured shareholders that the dip is temporary and driven by specific, addressable challenges.

“Yes, growth does remain below our expectations for now,” Goyal stated. “We think there are three key reasons behind the current slowdown in food delivery.”

According to Goyal, the first major factor is a general slowdown in consumer spending, particularly in discretionary categories like restaurant food. Secondly, Zomato has been facing a temporary shortage of delivery partners. This shortage, he said, is due to rising demand for delivery personnel in the booming quick commerce sector, which has seen rapid expansion in recent months.

The third reason is the growing competition from quick commerce platforms offering fast delivery of packaged food items. This trend, Goyal explained, has led to a dip in demand for traditional food delivery from restaurants, as some customers are opting for faster, packaged alternatives.

Why Zomato Delisted 19,000 Restaurants?

In addition to these external market dynamics, Goyal highlighted two internal decisions that also impacted growth during the quarter. Zomato recently delisted approximately 19,000 restaurants from its platform.

"We delisted ~19,000 restaurants who either a) did not pass muster on hygiene standards based on severe customer escalations, b) were mimicking established brands and misleading customers, or c) operating multiple identical menu listings to hog more listing impressions," Goyal said.

"As one of the leading food delivery platforms, we think it is critical to weed out bad actors which erode trust in the category," Goyal said.

"While this did impact order volumes, this was the right thing to do for the long term."

Another contributing factor was simply a matter of timing. The current quarter had one fewer day compared to the same period last year, which was a leap year. Goyal noted, “Adjusted for the above two specific factors, NOV growth could have been higher by about 2 percentage points.”

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Despite the slowdown, Zomato remains optimistic about the long-term outlook of food delivery in India. Goyal concluded on a reassuring note: “Overall, however, we don’t see any long-term structural reason for this slowdown, as the fundamentals – low penetration of restaurant food and increasing urbanisation and per capita income in India – remain unchanged.”

Zomato Q4FY25 Results

Eternal, which owns the Zomato and Blinkit brands, on Thursday reported a consolidated net profit of Rs 39 crore for the fourth quarter ended March. Eternal's revenue from operations in the January-March quarter stood at Rs 5,833 crore against Rs 3,562 crore a year ago, according to a BSE filing.

During the quarter under review, Eternal's total expense stood at Rs 6,104 crore, which was Rs 3,636 crore in the year-ago period.