The company did not divulge figures, but said that the average order value shrunk by 3% from last quarter. Its average order value in the 2021 calendar year stood at Rs 401, and it was Rs 356 in 2020.

Representative image of a person using Zomato on their phone: Zomato’s Q3FY22 losses narrow to Rs 63 cr, co to invest $400 mn into quick commerceImage for representation: Picxy.com/Abdul Munaff
Atom Delivery Thursday, February 10, 2022 - 19:41

Zomato on Thursday, February 10, announced that it will be investing $400 million over the next two years in its quick commerce category, while declaring its results for the third quarter of FY22. It added that the quick commerce category offers a huge addressable market and is in line with its food delivery business. In the quick commerce segment, Zomato said it made investments of $225 million in the last year into Blinkit, Shiprocket and Magicpin. 

The company said it has $1.7 billion in cash on its balance sheet, and a part of this capital will go towards this investment and primarily to its core food business. This includes food delivery, dining out and its B2B business Hyperpure. "We will need to continue to fund the growth investments here till the business becomes profitable," it stated.

“Blinkit is the closest to how we all know the quick commerce business today. Blinkit pioneered 10-minute grocery delivery in India post our ~$100 million investment in August 2021. Since then, the platform has scaled rapidly to ~$450 million annual run rate GMV (January 2022 annualized) and now operates with 400+ dark stores across 20 cities in India. 100% of Blinkit’s business now is in quick commerce format with a median delivery time of ~12 minutes,” Zomato said.

The company added that it will continue to make minority equity investments in business, and is looking to work with founders of seven other companies. In this quarter, it invested in UrbanPiper and AdonMo. 

Zomato added it is also in the process of setting up its own NBFC. This "will allow us to extend short term credit to our ecosystem – our delivery partners, customers and restaurant partners," the company's release stated. 

Zomato’s losses for the third quarter of FY22 narrowed to Rs 63.2 crore as opposed to Rs 352 crore in the same quarter last year. The narrowed loss comes due to the company’s one-time gain including from the sale of its stake in sports facilities provider Fitso for Rs 316 crore.

The company’s revenue grew to Rs 1,420 crore in the quarter up from Rs 800 crore on a year-on-year basis. Revenue from operations grew by roughly 9% on a quarter-on-quarter basis. The company did not divulge figures, but said that the average order value shrunk by 3% from last quarter. Its average order value in the 2021 calendar year stood at Rs 401, and it was Rs 356 in 2020. 

Customer delivery charges also declined by 22%. This was driven by Rs 7.5 per order reduction in customer delivery charges in Q3 FY22 as compared to Q2FY22. It added that discounts to customers reduced by Rs 5 on a quarter-on-quarter basis. 

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