NEW DELHI: India’s online food delivery and restaurant discovery platform Zomato saw a 57% drop in its third-quarter profit, as increased spending on its quick commerce platform, Blinkit, continued to weigh on margins.
The company reported a consolidated net profit of Rs 590 million (£4.8 million) for the quarter ending December 31, down from Rs 1.38 billion a year earlier.
Despite the profit slump, Zomato’s revenue from operations surged 64% to Rs 54.05 billion, slightly below analysts’ expectations of Rs 54.54 billion, according to LSEG data.
Revenue from Zomato’s main food delivery business grew by nearly 22% during the quarter. However, Blinkit, its quick commerce platform, saw revenue more than double as Zomato focused on expanding its presence by opening more stores and warehouses.
Zomato has been increasing discounts and offering free deliveries on Blinkit, while also setting up more ‘dark stores’ and warehouses to cater to urban customers. With a 46% share of the quick commerce market, Zomato faces stiff competition from Swiggy’s Instamart, start-up Zepto, and giants like Walmart-backed Flipkart and Tata Group-backed BigBasket.
($1 = 86.5600 Indian rupees)
