Once the Rs 4,447 crore (about $568 million) acquisition of Blinkit is closed, Zomato will experiment with cross leveraging its customers base for Blinkit and vice versa, its Founder and CEO Deepinder Goyal has stressed.
Goyal said that in India, super brands will work better than super apps.
“Which means that the Blinkit app will continue to operate independently. We will also start working on integrating the delivery fleet back-ends which should drive higher delivery efficiency over time,” he said in the letter to shareholders.
Tech integrations between the two companies will accelerate the pace of progress at both ends, he added.
According to the company, the losses for Blinkit are coming down every month — from Rs 2,040 million (about $26 million) in January 2022 to Rs 929 million ($12 million) in July.
“The losses have come down owing to a) operating leverage and b) improved execution. As the GOV (gross order value) per day per store goes up, losses come down given the high operating leverage in the business,” said Zomato CFO Akshant Goyal.
The company said that Blinkit has also shut down a number of unviable dark stores, which were not scaling and the team will continue to evaluate non-performing stores.
In just six months, the Blinkit business has scaled to 20 per cent of Zomato’s food delivery GOV while being present in less than 15 cities.
According to Akshant, Zomato took about 45 months since the launch of food delivery to get to the current monthly GOV scale of Blinkit.
Deepinder said that there is a misconception that Zomato would have gotten to the same (or perhaps bigger) scale and size had we launched quick commerce organically seven months ago.
Akshant added that in Gurugram, Blinkit GOV is 70 per cent of Zomato food delivery GOV (for June).
“Quick commerce cuts across a wide range of essential spends including grocery, fruits and vegetables, beauty and personal care, OTC medicines, stationery items, among others. Therefore, we expect the overall customer base, average order value as well as monthly order frequency to be higher than food delivery,” he mentioned.
With continued solid execution and synergy realisation with Zomato, post the transaction, the Blinkit journey to profitability “should only accelerate”, the company noted.
Zomato reported Rs 185.7 crore in consolidated loss for the quarter ending June 30, compared to a loss of Rs 359.7 crore in the previous quarter.
The consolidated revenue saw 67 per cent increase at Rs 1,413.9 crore from Rs 844.4 crore (same quarter last year), and 16.68 per cent up from Rs 1,211.8 crore in the last reported quarter.