Zomato has been around for quite some time. It knows what the benefits of a product market fit look like. All marketers would know this term. After all, any product or service that is launched needs to find its target market, where it actually ‘'fits'. The food delivery platform has used all marketing tactics- from quirky marketing to bold moves like rolling out an only 'Veg' food service delivery. Despite all the marketing gimmicks, the company's best performing 'asset' or service so to speak is its quick commerce platform, Blinkit.
Zomato's Quarterly Results
Yesterday, Zomato published its Q4 results. It recorded a profit of 175 crore, with a 28% increase from its last quarter. Much to the surprise of the food tech major, the revenue growth exceeded expectations- all thanks to its quick commerce business. It seems Zomato’s grocery and essentials delivery business has found a wider acceptance across Delhi NCR.
The limelight was taken by Blinkit, whose picture was even featured in the company’s shareholder report. This should come as no surprise, seeing that Goldman Sachs has reported previously that Blinkit would have a larger share in Zomato’s profitability.
The enthusiasm for quick commerce was also evident in Zomato’s expansion plans for Blinkit. The company is doubling down on increasing the number of dark stores from 576 to 1000 by March 2025. This is projected to increase Blinkit’s revenue 4 times its current break-even point. Blinkit’s expansion will be focused on the Top 8 cities in the country including Delhi NCR, Mumbai, Hyderabad, Bengaluru, Chennai, Kolkata, Ahmedabad and Pune.
Blinkit’s Aggressive Expansion
What explains Blinkit’s expansion is the slew of competitors emerging in the market. Having the first mover advantage, it's natural for the platform to try and stay ahead. Flipkart is entering the Q-commerce business in the next few months. Bigbasket is also planning to shift from a slotted delivery model to 10-minute deliveries. With emerging competitors, the race to stay ahead has intensified.
Competitive Advantage
Senior executives at Blinkit believe that its delivery model has found a fit in Delhi NCR because of the quality of service it provides. There is an uptick in the number of orders because of fast and consistent time of delivery. As promised, the order is delivered on the doorstep with an average of 12 minutes.
Blinkit also boasts of a delivery fleet that solely focuses on grocery delivery. There are delivery partners dedicated to particular pin codes. Most players in the quick commerce space lack the resources and also decentralised operation model of Blinkit. The company has citywide CEO's. who anticipate the events happening within a certain area and demand vis a vis the same. For example, during Mother's Day, the demand for flowers and chocolates rose around major metro cities on the app. Zomato also launched a 30-minute cake delivery in time for Mother's Day. The food delivery app also plans to introduce 'priority delivery' to reduce wait times for customers.
