Zomato launched its Cashless product in Dubai earlier this year. However, on October 18, the company announced through a blog post that it’s shutting down this business “due to a lack of product-market fit in its current form”.
Deepinder Goyal, CEO and founder of Zomato, lists the following reasons for shutting down the product:
• The product wasn’t a part of the natural user flow for a typical Zomato user. This is because users are accustomed to paying after a meal, whereas the Cashless services needed them to pay before.
• Most users were the early adopters of technology products, but the product didn’t scale much beyond this audience.
• The cost of educating restaurant staff on Cashless was too high, and takes continuous maintenance. Goyal explains that, in hindsight, simply the cost of providing iPads to restaurants was high to begin with. Moreover, the continuous training of staff combined with high attrition rates at restaurants wasn’t sustainable.
• Bottom-line, customer acquisition cost was high. Due to all the above reasons, “it wasn’t financially viable for us to keep the business running, as the operational costs of running it exceeded the commissions the product was generating for us. Over time, no matter what we could do, the unit economics were just not going to work,” says Goyal in his post.
Not all hope is lost though for Cashless as Goyal says that “once the ecosystem is in place to counter the above challenges”, Cashless will make its entry back to Dubai and other markets. He adds that Zomato will work on a plan using Base and Book, its point-of-sale and table management system.
