Blinkit continues to drive a significant portion of its revenue from major cities, but Zomato is now shifting focus to smaller cities, planning to expand its quick commerce arm with more dark stores over the next year.
During a post-earnings call, Zomato CEO Deepinder Goyal shared that the company sees strong potential for Blinkit in smaller cities, particularly from a return on investment (RoI) perspective. As part of its ongoing expansion, Blinkit plans to open a substantial number of dark stores in these regions in the coming year.
Continue Exploring: NONSTOP launches first flagship store in Mumbai, offering mobility and wellness solutions
“We believe that once we establish a solid presence and density in these smaller cities, we’ll be in a better position to share data about how these cities differ, if at all, from the larger ones,” Goyal remarked.
While Blinkit’s top eight cities currently account for 80% of its business, the shift to smaller markets comes with new opportunities. However, the company reported a sharp rise in its adjusted EBITDA loss for Q3 FY25, which saw a 13-fold increase to INR 103 Cr from INR 8 Cr in Q2. Compared to last year, the loss grew by 5.7%.
Continue Exploring: The End of a Retail Era: Neville Noronha Checks Out, Anshul Asawa Checks In
Goyal noted that the quarter had been one of the most challenging in the past ten, with a surge in marketing expenses due to heightened competition. Blinkit’s chief Albinder Dhindsa addressed these pressures in the company’s shareholder letter, explaining that increased competition has been a driving force behind customer awareness and the faster adoption of quick commerce.
Drawing parallels to the early days of food delivery, Dhindsa pointed out that intense competition leads to more spending on customer acquisition across the industry. He added that this competition ultimately benefits players who maintain strong service quality, even as margin expansion has slowed. However, Dhindsa reassured investors that this is only a temporary setback.
