Zomato‘s quick commerce arm, Blinkit, continued its growth trajectory, maintaining contribution positivity for the second consecutive quarter in the three-month period that ended December 31, 2023.
In its shareholder letter, Zomato reported that Blinkit’s contribution margin, as a percentage of gross order value (GOV), within the overall business, showed notable improvement, rising to 2.4% in Q3 FY24 from 1.3% in Q2 FY24.
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The company defines contribution as adjusted revenue excluding costs related to dark store operations, delivery, packaging, and other expenses.
“In Q3 FY24, close to 70% of our stores were contribution positive and ~20% of these were operating at a 5%+ contribution margin resulting in a growing pool of contribution profit, which is creating room for investing in new stores while also continuing to improve the aggregate contribution margin,” Blinkit Co-Founder and CEO Albinder Dhindsa said.
In Q3 FY24, Blinkit recorded a revenue of INR 644 Cr, compared to INR 301 Cr in the same quarter last year and INR 505 Cr in Q2 FY24. The adjusted EBITDA loss for the quick commerce vertical continued to improve, reaching INR 89 Cr in the quarter ending December 2023, down from INR 227 Cr in Q3 FY23 and INR 125 Cr in Q2 FY24.
Driven by festive growth, Blinkit experienced a significant increase in both operational and financial metrics. Gross order value (GOV) surged by 103% year-on-year (YoY) to INR 3,542 in the quarter ending December 2023, while the average order value (AOV) saw a 14% YoY increase to INR 635 in Q3 FY24.
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Dhindsa attributed the increase in demand to the festive season, noting that a significant portion of the growth in Gross Order Value (GOV) was driven by higher order volumes. Additionally, he highlighted that the GOV was bolstered by an uptick in Average Order Value (AOV), influenced by a greater proportion of product categories with higher average selling prices.
During the quarter, the company expanded its footprint with the addition of 40 net new stores, bringing the total store count to 451 by the end of December 2023.
In its third consecutive profitable quarter, Zomato saw a significant increase in consolidated net profit, which quadrupled sequentially to INR 138 Cr in Q3 FY24. Additionally, the foodtech major experienced a substantial 68% year-over-year surge in operating revenue, reaching INR 3,288 Cr in the same quarter.
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