Govt-backed ONDC sees rapid adoption, CEO T. Koshy expects tenfold merchant growth in coming year

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February 8, 2024

On Thursday, Thampy Koshy, the MD & CEO of the government-backed Open Network for Digital Commerce (ONDC), said that the platform currently hosts approximately 300,000 merchants and is expected to multiply in the coming year.

“We started with 600 merchants on-board in January last year. At present there are around 3 lakh merchants (on-boarded). In the coming year we expect this will be multiplying and build its momentum. At least ten times growth I expect in the coming year,” Koshy said during an event.

He added that in January, ONDC recorded 6.7 million transactions, and he anticipates a monthly transaction growth of 20-30 percent moving forward.

Koshy was addressing the audience following the signing of an agreement between QCI and ONDC during the launch of the DigiReady Certification (DRC) portal.

For the DRC initiative, QCI and ONDC aim to assess and certify the digital readiness of MSME entities. With the help of an online self-assessment tool, MSMEs can evaluate their preparedness to seamlessly onboard as sellers on the ONDC platform, thereby expanding their digital capabilities and business potential.

Continue Exploring: In a first, fair price shops join ONDC platform for digital transformation

“It is a way of helping people to be ready so that they can join the network as fast as possible. We are expecting that thousands of them will come onboard,” Koshy said.

Jaxay Shah, Chairperson of the Quality Council of India (QCI), said, “The launch of the DRC portal marks a pivotal moment in our mission to empower MSMEs and make e-commerce more inclusive and accessible.”

ONDC is an initiative of the commerce and industry ministry aimed at creating a facilitative model to help small retailers take advantage of digital commerce.

It’s not an application, platform, intermediary, or software; rather, it comprises specifications crafted to promote open, unbundled, and interoperable networks.

Continue Exploring: ONDC disrupts food delivery landscape: 50,000 restaurants join platform, challenging Zomato and Swiggy dominance

Chef Harpal Singh Sokhi’s Karigari makes debut in South India with Bengaluru launch

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February 8, 2024

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Celebrity chef Harpal Singh Sokhi‘s renowned fine-dining restaurant chain, Karigari has entered South India with the opening of its latest outlet in Bengaluru. According to an industry official’s post on social media, the new establishment is located at Phoenix Mall of Asia, Yelahanka, Bengaluru, Karnataka.

This marks the eighth restaurant for Karigari in India.

“Master chef Harpal Singh Sokhi brought its first restaurant in Southern India. Karigari is now launched at Mall of Asia, Bengaluru,” said Ketan Kulkarni, general manager – leasing, at The Phoenix Mills Ltd. in a LinkedIn post.

The chef-led restaurant Karigari was founded by Yogesh Sharma with chef Harpal Singh Sokhi as its face. Its outlets blend traditional Indian flavors with a contemporary touch.

Currently, Karigari boasts a presence in cities such as Delhi, Dehradun, Faridabad, Gurgaon, and Noida.

Continue Exploring: Chef Harpal Sokhi’s popular restaurant chain Karigari set to expand across India with INR 30 Crore investment

Karigari is owned by Flying Dutchman Restaurants LLP, the entity responsible for the jungle and aqua-themed restaurant ‘Jungle Jamboree’ and the seafood restaurant ‘The Flying Dutchman’.

ONDC, NCCF, and Shiprocket collaborate to deliver essential household staples directly to homes under ‘Sarkar se Rasoi Tak’ initiative

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February 8, 2024

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In a significant move to streamline access to essential household commodities, the Open Network for Digital Commerce (ONDC), the National Cooperative Consumers’ Federation of India (NCCF), and homegrown logistics solution provider Shiprocket on Thursday joined hands to support the government’s ‘Sarkar se Rasoi Tak’ initiative.

The collaboration aims to deliver key staples directly to consumers’ homes via the ONDC network.

According to a statement by the ONDC, people residing in the Delhi-NCR region, including Gurugram and Faridabad, will be able to purchase Bharat brand rice, wheat flour, and lentils online. The products come with the assurance of government-approved prices and complimentary delivery services.

Continue Exploring: Govt to sell Bharat brand rice on major e-commerce platforms, targets hoarding with mandatory stock disclosure

T Koshy, Managing Director and CEO at ONDC, said, “The ‘Sarkar se Rasoi Tak’ initiative epitomises the transformative power of digital commerce in democratising access to essential goods. ONDC is proud to participate in this collaborative effort to promote inclusivity and empower consumers across India.”

Consumers can utilize ONDC-supported buyer applications like Paytm, Magicpin, Mystore, and Pincode to place orders for these products.

“Leveraging the ONDC network’s wide reach and advanced technology, we’re set to redefine access to essential commodities,” said Anice Joseph Chandra, Managing Director at NCCF.

Continue Exploring: In a first, fair price shops join ONDC platform for digital transformation

Furthermore, Shiprocket aims to enhance the seller experience within the ONDC Network by providing simplified onboarding processes and comprehensive post-support services.

“While this initiative is currently running in the Delhi-NCR region, we plan to expand it to other cities of the country via multiple collaborations,” said Saahil Goel, CEO and Co-founder, Shiprocket.

Incorporated on December 31, 2021, ONDC is an initiative led by the Department for Promotion of Industry and Internal Trade (DPIIT), under the Ministry of Commerce and Industry, with the goal of pioneering a transformative framework for digital commerce.

Continue Exploring: ONDC network live in 500 towns & cities, MoS Commerce affirms full adherence to e-commerce regulations

Zomato’s B2B vertical Hyperpure sees exponential growth in Q3 FY24, revenue inches closer to INR 1,000 Cr

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February 8, 2024

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For years, Zomato has relied heavily on food delivery, with a recent foray into quick commerce. However, alongside these ventures, the company has quietly nurtured another arm for nearly half a decade: Hyperpure. Now, Zomato is poised to ramp up efforts in this domain, exploring opportunities in food processing and supplying semi-finished perishables.

In Q3 FY24, the revenue of Zomato’s Hyperpure vertical surged by more than 2X YoY, reaching INR 859 Cr. Comparatively, on a quarter-on-quarter basis, Hyperpure’s Q3 revenue showed a 15% increase from INR 745 Cr reported in the quarter ending September 2023.

Launched in April 2019, the B2B restaurant supplies venture is nearing its fifth anniversary, and is now demonstrating much of the potential that CEO Deepinder Goyal and other company leaders have previously highlighted.

In the Q3 FY24 shareholders’ letter, Zomato attributed Hyperpure’s revenue growth to the significant expansion in both its core restaurant supplies business and the emerging quick commerce sector.

“To address a growing need of our restaurant partners, we are now setting up a plant for processing value-added food supplies including, sauces, spreads, pre-cut and semi-finished perishable products, among others,” the company stated in the shareholders’ letter.

Despite receiving occasional acknowledgment from Zomato’s management in each quarterly report since its public listing, there has been little insight into how the company plans to scale Hyperpure and integrate it more substantially into its overall business strategy.

For instance, during its first annual general meeting (AGM) after the public listing, Zomato stated that Hyperpure could emerge as big as or even bigger than its food delivery business.

“We think that this business has the potential of becoming as large or even larger than our food delivery business because the addressable market here is potentially larger than food delivery,” Zomato chairman Kaushik Dutta had said in 2022.

However, there were tangible advancements in the Hyperpure sector indicating Zomato’s commitment to long-term growth in the B2B supplies segment.

In August 2022, Hyperpure completed the acquisition of Blinkit’s warehousing and ancillary services business for INR 61 Cr. Additionally, last year in May, Zomato appointed Rishi Arora as the CEO of the Hyperpure vertical, signaling a renewed emphasis on profitability.

Continue Exploring: Zomato strengthens core team with senior appointments in food delivery and Hyperpure divisions

In November 2023, while announcing the Q2 results, Zomato highlighted that Hyperpure, serving as a strategic back-end for restaurant partners, was experiencing improved success.

Presently, Zomato generates revenue through various streams including ad revenue, onboarding fees, delivery commissions, and per-order commissions from restaurants. Hyperpure, as a vertical, was envisioned as a means to expand this revenue umbrella by attracting more restaurants.

In its Q3 report, Zomato stated that the addition of a processing plant for food supplies holds the potential to increase margins and foster greater engagement with its restaurant partners.

This is significant because the company’s average monthly active food delivery restaurant partner base has increased by 21% over the last four quarters. Transitioning from 209 such partners in Q3 FY23 to 254 monthly active restaurant partners for food delivery as of Q3 FY24, Zomato aims to capitalize on this expanding base to maximize revenue from restaurant partners.

Meanwhile, Zomato experienced a significant surge in its consolidated profit after tax, rising to INR 138 Cr in Q3 FY24 from INR 36 Cr in the preceding September quarter.

Continue Exploring: Zomato reports third consecutive profitable quarter with INR 138 Cr PAT in Q3 FY24

Zomato continues streamlining operations: Completes liquidation of subsidiaries in Vietnam and Czech Republic

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February 8, 2024

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Zomato, a leading player in the foodtech sector, has completed the liquidation of its subsidiaries in Vietnam and the Czech Republic.

In an exchange filing on Wednesday, Zomato announced that its subsidiary, Zomato Vietnam Company Ltd (ZVCL), has been liquidated with effect from February 2, 2024.

In another exchange filing, Zomato stated that its Czech subsidiary, Lunchtime.cz s.r.o, has also been liquidated, effective from February 6, 2024.

Continue Exploring: Zomato to liquidate Czech subsidiary Lunchtime as part of global downsizing strategy

This development comes approximately a month after the company initiated the liquidation process for its Vietnamese subsidiary.

Continue Exploring: Zomato announces liquidation of Vietnamese and Polish subsidiaries as global restructuring continues

In an exchange filing on January 4, the company clarified that ZVCL is not considered a significant subsidiary, and its dissolution will not impact the company’s revenue. ZVCL’s net worth was reported to be INR 36 Lakh.

The liquidation of the two businesses comes at a time when the startup is aggressively closing down its international subsidiaries. Last year, it shut down businesses in multiple countries, including Indonesia, Jordan, and Slovakia.

Continue Exploring: Zomato’s Indonesian subsidiary PTZMI starts liquidation process, no significant impact expected on turnover

The startup is also currently in the process of liquidating another step-down subsidiary, Polish Gastronauci SP. Z.O.O.

It’s worth mentioning that the foodtech major has aggressively cut down its costs in the last two years to achieve, and subsequently sustain, profitability.

Earlier today, Zomato reported a consolidated net profit of INR 138 Cr in the December quarter of 2023. This marks a significant increase from the INR 36 Cr profit reported in the September quarter, following a net loss of INR 136.6 Cr in Q3 FY23.

Continue Exploring: Zomato reports third consecutive profitable quarter with INR 138 Cr PAT in Q3 FY24

Maintaining its robust performance, Blinkit, the company’s quick-commerce vertical, recorded its second consecutive quarter of positive contribution in Q3.

Continue Exploring: Blinkit continues growth trajectory with second consecutive quarter of positive contribution

Before releasing its Q3 results, Zomato additionally disclosed that it had allocated 10.88 Cr equity shares through its various employee stock option plans (ESOPs).

Zomato’s shares concluded today’s trading session up by 2.42% at INR 144 on the BSE.

Continue Exploring: Zomato allots 10.88 Crore equity shares for employee stock options ahead of Q3 FY24 earnings

Swiggy faces another high-profile departure as independent director Mallika Srinivasan steps down ahead of IPO

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February 8, 2024

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In another top-level exit at Swiggy, the food delivery major’s independent director Mallika Srinivasan has stepped down, nearly a year after taking up the role.

This development comes as Swiggy prepares to debut on the stock exchanges, touted as the largest IPO by an internet company, with an issue size of $1 billion (INR 8,300 crore).

Continue Exploring: Swiggy may file IPO by fiscal year end, plans to raise capital with combination of offer-for-sale and new issue; Prosus contemplates stake reduction

The company announced on Thursday that Srinivasan has stepped down due to increasing business commitments.

“Working with a young and dynamic team at Swiggy was truly enriching and enjoyable and wished the Board more milestones and success in the years ahead,” Srinivasan said.

The latest development adds to Swiggy’s series of high-profile exits within a short span. Key figures including Karthik Gurumurthy (Senior Vice President and Head of Swiggy Instamart), Dale Vaz (CTO), Anuj Rathi (Senior Vice President, Central Revenue and Growth), Ashish Lingamneni (Vice President, Marketing), and Dineout co-founder Vivek Kapoor have stepped down from their respective positions.

Continue Exploring: Swiggy’s Senior VP of Revenue and Growth, Anuj Rathi, steps down after seven years

In February last year, Swiggy appointed three directors to its board: Srinivasan, Shailesh Haribhakti, and Sahil Barua.

Interestingly, in December, Swiggy appointed FMCG veteran Anand Kripalu as an independent director and the chairperson of its board of directors to bolster its board ahead of its initial public offering (IPO).

The food delivery major also recently brought on board Ashwath Swaminathan, a veteran of Hindustan Unilever (HUL), as its chief growth and marketing officer.

Last month, Snackfax reported that the foodtech giant is looking to terminate 400 staff members, or roughly 6% of its total workforce, as part of a corporate realignment process. The layoffs are anticipated to affect employees across departments, with the technology and customer support teams facing the most significant reductions.

Continue Exploring: IPO-bound Swiggy initiates workforce reduction, plans to cut 6% of jobs to enhance profitability

For the financial year ending March 2023 (FY23), Swiggy reported a revenue surge of 40% to INR 8,264.4 Cr from INR 5,704.9 Cr in FY22 as it scaled up its quick commerce vertical during the year.

Blinkit continues growth trajectory with second consecutive quarter of positive contribution

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February 8, 2024

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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.

Continue Exploring: Blinkit records first positive contribution, anchoring Zomato’s quick commerce success

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.

Continue Exploring: New Year festivities propel Zomato, Swiggy, and Blinkit to record-breaking delivery figures in India

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.

Continue Exploring: Zomato reports third consecutive profitable quarter with INR 138 Cr PAT in Q3 FY24

Zomato reports third consecutive profitable quarter with INR 138 Cr PAT in Q3 FY24

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February 8, 2024

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Zomato, a major player in the foodtech sector, announced on Thursday its third successive quarter of profitability. For the December quarter (Q3) of the fiscal year 2023-24 (FY24), the company reported a consolidated profit after tax (PAT) of INR 138 Cr. This achievement was driven by a significant expansion in its quick commerce division.

The company’s Profit After Tax (PAT) surged by 283% compared to the INR 36 crore recorded in the previous quarter. In Q3 FY23, the company had reported a net loss of INR 346.6 crore.

Continue Exploring: Zomato reports remarkable surge in profit, achieving second consecutive profitable quarter in FY24

Zomato’s operating revenue surged to INR 3,288 crore in Q3 FY24, up from INR 2,848 crore in Q2 FY24. This represented a 68% year-on-year (YoY) increase from the operating revenue of INR 1,948.2 crore in Q3 FY23.

Zomato reported a 47% year-over-year (YoY) increase and a 13% quarter-on-quarter (QoQ) rise, reaching INR12,886 Cr in gross order value (GOV) for its B2C businesses. Nevertheless, the company observed subdued growth in its food delivery segment, attributing it to a restrained demand environment within the broader restaurant industry.

In Q3 FY24, the company saw its food delivery gross order value (GOV) increase by 27% year-over-year (YoY) and a modest 6.3% quarter-on-quarter (QoQ) to INR 8,486 Cr. Meanwhile, Zomato’s quick commerce business Blinkit experienced robust growth, with a 103% YoY and 28% QoQ rise in GOV to INR 3,542 Cr in the same period.

Following its first-time positive contribution in Q2 FY24, Blinkit’s contribution as a percentage of gross order value (GOV) rose to 2.4% in Q3, up from 1.3% in the previous quarter.

In terms of profitability, Zomato’s consolidated adjusted EBITDA remained positive for the third consecutive quarter, reaching INR 125 Cr, a significant improvement from the INR 265 Cr loss reported in the same quarter of the previous year.

Zomato attributed Blinkit’s growth primarily to the strong increase in demand driven by various festivals and occasions during the quarter.

Continue Exploring: Blinkit records first positive contribution, anchoring Zomato’s quick commerce success

“This growth was also fuelled by having the right assortment which addressed the most pertinent needs of our customers,” said Zomato in its statement. “The team also ensured consistently high service levels through minimal stock-outs and adequate delivery partner availability during periods of peak demand.”

In Q3, Blinkit also expanded its network by adding 40 net new stores, bringing the total store count to 451 by the end of the quarter.

After the Q3 earnings announcement, Zomato’s shares surged by 4.6% to INR 147 on the BSE on Thursday.

Continue Exploring: Zomato allots 10.88 Crore equity shares for employee stock options ahead of Q3 FY24 earnings

Britannia Industries’ Varun Berry acknowledges rural growth slump amid Q3 FY24 results

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February 8, 2024

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After the release of its Q3 FY24 results, Varun Berry, Vice-Chairman and Managing Director of Britannia Industries, informed analysts that rural growth is not progressing as it did in the past decade.

“We haven’t seen rural growth in the same manner as we did in the past 10 years,” said Berry.

Continue Exploring: Britannia’s Q3 FY24 net profit slides 40% to INR 932.40 Crore

He admitted that urban growth presently surpasses rural growth; nonetheless, he emphasized that the situation will likely improve soon, noting the ongoing expansion of rural distribution by the maker of Good Day biscuits.

“We continue to do so even though we are not gaining the traction we were accustomed to,” Berry added.

The company has expanded its direct coverage to 2.76 million outlets and bolstered its rural distribution by appointing 29,000 rural distributors, compared to 28,000 in December 2022.

During the quarter, the leading food corporation also implemented price reductions and introduced consumer promotions for its key brands.

“To ensure that we don’t maintain the same prices but align them with the inflation of raw materials, we have taken strategic pricing actions in some of our key brands. We have also implemented tactical consumer promotions to drive consumption of those products, as we have observed that consumption trends, especially in rural areas, are not as robust as in previous years,” Berry added.

Compared to the corresponding quarter last year, the company reduced prices by 4 percent to reflect the decrease in raw material costs for consumers. Speaking about competition from regional players, Berry remarked that they are presently experiencing a “honeymoon phase,” and it will require a few months to assess their success.

Berry additionally briefed analysts that the company will closely observe the fluctuating stock prices of commodities, given their high volatility over the past two or three years.

“We remain vigilant on the competitive pricing actions resulting from commodity inflation. Our strategy will remain focused on driving market share, a critical aspect for us in all of our categories,” he said.

Zomato allots 10.88 Crore equity shares for employee stock options ahead of Q3 FY24 earnings

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February 8, 2024

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Foodtech giant Zomato has allocated 10.88 crore equity shares under its multiple employee stock option plans (ESOPs) ahead of its Q3 FY24 earnings.

Zomato announced via an exchange filing that its board has sanctioned the issuance of 10,88,68,081 equity shares, each with a face value of INR 1, fully paid-up, in response to the exercise of 9,21,33,979 vested options by identified employees of the company and its subsidiaries.

The foodtech giant’s Employee Stock Ownership Plan (ESOP) for 2021 saw the highest allotment with over 9 crore shares, whereas its ESOP for 2018 received an allotment of 1.67 crore equity shares.

After the allotment, the company’s issued, subscribed, and paid-up equity share capital would increase to nearly INR 882 Cr, up from its previous level of INR 871.1 Cr.

Zomato’s stock surged by up to 4% in intraday trading on Thursday, reaching INR 146.25 on the BSE. As of 1:30 PM IST, the company’s shares were trading 3% higher at INR 144.9 on the exchange.

In Q2 FY24, the company recorded its second consecutive profitable quarter, posting a net profit of INR 36 Cr. Meanwhile, its operating income for the quarter reached INR 2,848 Cr.

Continue Exploring: Zomato reports remarkable surge in profit, achieving second consecutive profitable quarter in FY24

Ahead of the Q3 earnings, brokerages like HSBC, Goldman Sachs, and Jefferies have recently raised their price targets for Zomato, citing the strong growth in its food delivery and quick commerce businesses.

Continue Exploring: Zomato’s bull run continues as Goldman Sachs and Jefferies raise price targets post HSBC’s lead

Infact, the Street’s focus is currently heavily centered on Zomato’s Blinkit business.

Continue Exploring: Blinkit records first positive contribution, anchoring Zomato’s quick commerce success

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