Talabat To Shut Down Zomato’s UAE Food Delivery Business

Kuwait-based food delivery app Talabat will shut down Zomato’s UAE food delivery business on November 24, the Indian foodtech giant said in an exchange filing on Monday (November 14).

Following the shutdown, the Zomato UAE app will redirect users to the Talabat app for food delivery.

“We would like to update the exchange that the company will discontinue rendering of services to Talabat in the UAE w.e.f. November 24, 2022, and the customers looking to order food through the Zomato app in UAE will be redirected to Talabat, as per the terms of the agreement between the parties,” the filing said.

UAE was the first global foray of Zomato in 2012 and accounted for 20% of its orders at one point. Talabat acquired Zomato’s food delivery business in the UAE in 2019 for $172 Mn.

As per the agreement between the two companies, Zomato was rendering services to Talabat in the UAE in return for cost reimbursement since the transaction.

According to a report by Caterer Middle East, the restaurants registered on Zomato’s platform were informed of the change through an email. The report added that the money owed to restaurants by Zomato, unused advertising spend or credit notes will be credited to them by December 30, 2022.

“We want to thank you for being a trusted partner of Zomato food ordering over the years. Your contribution has been significant in offering a great experience to and delighting our beloved customers,” the email read.

Zomato will continue to offer restaurant discovery and dining-out services in the UAE. 

Talabat’s mail also said that it would launch Zomato’s loyalty program ‘Zomato Pay’ along with its ‘Vibe Check’ feature on its app.

“We are redefining the way our customers experience dining out through the launch of a new feature called ‘Vibe check’ along with ‘Zomato Pay’ which will further enhance the value for our customers as well as restaurant partners,” the mail said.

The Indian foodtech giant has already launched Zomato Pay, through which customers can make payments at partner restaurants and avail of various discounts and cashback offers, across 12 cities in India and the UAE.

The ‘Vibe Check’ feature allows restaurants to post short video stories to help generate more traction.

Last week, Zomato reported a 35% sequential rise in its loss to INR 250.8 Cr in Q2 FY23. The foodtech’s operating revenue increased 62% to INR 1,661.3 Cr during Q2 FY23 from INR 1,024.2 Cr in the corresponding quarter last year. This was nearly a 17% increase from INR 1,413.9 Cr in Q1 FY23.

Most of the total revenue in the quarter under review was from its food delivery business, with INR 1,135.7 Cr coming solely from this vertical.

Update | November 11, 2022, 8:30 PM

The story and the headline have been updated to reflect the fact that only Zomato’s food delivery business is being shut down in the UAE, not the app.

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