Business: Zomato, a prominent player in the food delivery industry, is contemplating the expansion of its swift 10-minute delivery service, Blinkit, by incorporating a diverse range of products, as indicated in a report by the Economic Times. This strategic initiative positions Zomato to directly compete with major e-commerce players such as Amazon and Flipkart. In order to realize this vision, Zomato is strategically enhancing its supply chain capabilities to procure products directly and efficiently manage inventory, as per sources cited by ET.

The foray into the direct-to-consumer (D2C) space is anticipated to serve as a key driver for Zomato’s long-term growth. The company is actively engaged in discussions with individual brand owners spanning various categories to secure a robust inventory, according to the report. Notably, Zomato’s approach involves orchestrating the flow of products for Direct-to-Consumer (D2C) brands in a manner akin to traditional marketplaces, while refraining from direct ownership of inventory. Zomato has chosen not to comment on queries from the Economic Times regarding these developments.

Zomato’s strategic moves to bolster its Blinkit platform’s expansion into various product categories include two unsuccessful attempts to acquire and merge with Shiprocket, a notable e-commerce enabler with a focus on working with Direct-to-Consumer (D2C) brands, as reported by another source to the Economic Times. Despite Zomato’s interest, Shiprocket declined the acquisition offer.

In Q3FY24, Blinkit exhibited significant growth, with its Gross Order Value (GOV) doubling to Rs 3,542 crore, marking a remarkable 103 percent YoY increase from Rs 1,749 crore in Q3FY23. The overall success was reflected in Zomato’s financial performance, where the net profit for October-December reached Rs 138 crore, marking the third consecutive profitable quarter. The revenue for the same period surged by 69 percent YoY to Rs 3,288 crore. Notably, Zomato’s advertising revenue experienced even more substantial growth, rising by 220 percent YoY during the October-December quarter, although the specific earnings from ads were not disclosed.

This positive financial trajectory for Zomato contrasts sharply with the previous year, where the company reported a net loss of Rs 347 crore and revenue of Rs 1,948 crore during the same quarter.

Zomato CEO Deepinder Goyal expressed confidence in Blinkit’s future, emphasizing its potential to deliver shareholder value over the next decade. In a letter to shareholders on August 3, 2023, Goyal projected that Blinkit’s Gross Order Value (GOV) is comparable to Zomato’s GOV in certain large cities where both platforms operate. Goyal anticipates Blinkit’s continuous growth and envisions it as a more beneficial contributor to Zomato’s success in the years to come.