Popular restaurant aggregator and food delivery app Tomato, owned by Deepinder Goyal, has just announced results. The company has just posted a revenue of Rs 3873 crore and reported a 61 percent year on year growth. One of the highlights of the report is that Zomato’s quick commerce venture Blinkit has turned adjusted EBITDA positive in March 2024. Deepinder Goyal, Founder and CEO, Zomato has attributed the success to all of the quick commerce ventures owned by Zomato.
“We could not have imagined the current state of all four of our businesses – food delivery, Blinkit, Going-out and Hyperpure. I think the team has executed phenomenally well over the last couple of years, and continues to stay (more or less) focused with their ears to the ground. Our journey in the last two years has, in so many ways, increased the expectations our stakeholders have from us and we will try our best to live up to them,” he said.
Important Details on Expansion of Blinkit
Quick commerce for Tomato on the while has grown by 97 percent Y-o-Y says the company and the growth has been driven by quick store expansion. The company has added 75 net new stores in Q4FY24, taking the total store count to 526, which is more than the number of stores added in the three preceding quarters cumulatively. ““One of the key vectors for growth for us right now is store expansion. In Q4FY24, we added 75 net new stores taking our total store count to 526. In the current quarter (Q1FY25), we expect to add another 100 stores. At this point, we are aiming to get to 1,000 stores by the end of FY25,” said Albinder Dhindsa, Founder and CEO, Blinkit.
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As mentioned earlier, Blinkit has turned Adjusted EBITDA positive in the month of March 2024, and is currently in a steady state, 4-5% Adjusted EBITDA margin (as a % of GOV), which is expected in this business. “ “In addition to scaling up the existing store network and use cases, we will be adding more use cases so the Blinkit platform is even more useful in the everyday lives of our customers. We plan to stick to making our service even more reliable and loved for our customers. And just like today, we will strive to maintain an edge over competition for the quality and innovation that we stand for,” added Dhindsa.
Growth Plans for Blinkit
While Blinkit maintains a presence in 26 cities, their expansion efforts are concentrated on the top eight cities in India. Their objective over the upcoming quarters is to achieve a level of market penetration in Bengaluru and other major cities such as Mumbai and Hyderabad equivalent to that of Delhi NCR, both in terms of store footprint and GOV. This strategy alone is projected to result in approximately a fourfold increase in their GOV.
“Our investments (intellectual and financial) in the business are over-indexed to making our service more and more reliable. Reliability means a) availability of products at all times and b) quick and predictable delivery times. We believe that a business built on the back of great service quality is much tougher (and hence more defensible) than just offering lower prices,” stated Dhindsa.
What Makes Blinkit successful
The company asserts that a business grounded in exceptional service quality presents a greater challenge and thus possesses stronger defenses compared to solely relying on lower prices. “In March 2024, our average delivery time was 12.5 minutes. Besides delivering quickly, ~75% of our orders were delivered within two minutes of the promised time we showed to our customers and our accuracy on fulfilling items to customers was 99%+. This meant our service was fast, reliable and stood up to the promise we made to our customers,” added Dhindsa.
