Ads take Blinkit past Zomato’s food delivery business growth in Q3

Business Standard



After a prolonged period of high cash burn, Zomato’s quick commerce business Blinkit has seemingly cracked the code for sustainable growth.


The company’s growth in the October-December (Q3) quarter of 2023-24 (FY24) outpaced that of Zomato’s core food delivery business on the back of a strong festival season and increased operational efficiencies. However, it should be noted that Blinkit’s revenue is about a third that of Zomato. So, a lower base is also helping grow faster.


Nonetheless, the quick commerce advertising opportunity is admittedly turning out to be quite promising for Blinkit.


The company’s revenue from advertisements grew by 220 per cent year-on-year (YoY) in Q3 of FY24, more than double that of Blinkit’s gross order value (GOV), which jumped 103 per cent during the same period.


Moreover, the number of advertisers on the platform jumped 130 per cent to 557 in Q3, up from 242 in the same period a year ago.


It is, however, important to note that the over 200 per cent growth in ad spends is coming off of a low base.


According to Blinkit’s top management, the platform is emerging as a preferred advertising platform for both large and emerging brands in the country.


“Transacting frequency on quick commerce platforms like Blinkit are amongst the highest in any consumer internet category in India. Brands are therefore looking to build visibility with a highly engaged and fast-growing customer base with spending power,” said Albinder Dhindsa, CEO, Blinkit, in a letter to shareholders.


However, Blinkit’s brand-centric approach is not novel.


After launching its own self-serve advertising platform for brands – Blinkit Brand Central – in December 2022, the firm last year also launched a facility for brands on its app to create custom pages and promote products. Using ‘Brand Stores’, sellers could track real-time performance of products, highlighting them and creating their own design.


Once set up, brands could also look at real-time analytics around performance of their pages, and create content and sections according to relevance or customers’ likes.


“Our programmatic ad-bidding platform gives brands full flexibility to efficiently serve ads with multiple permutations and combinations, thereby helping them drive more targeted ad spends,” Dhindsa said.


Given the speed of order fulfilment in quick commerce, brands are also able to see almost real time impact of their ad spends. This, coupled with the hyperlocal insights and targeting that is possible on platforms like Blinkit, means that brands can generate higher return on investment.


This has led to a “healthy increase” in the number of advertisers and ad spend per advertiser on the platform over the last five quarters.


“Revenue concentration of the top 20 advertisers has fallen from 61 per cent in Q3 FY23 to 40 per cent in Q3 FY24, despite a 108 per cent YoY growth in ad spends by the top 20 advertisers,” Dhindsa revealed.


Hyper growth


The increased ad revenue is one of the several reasons for Blinkit’s rapid growth in Q3.


The platform, which was contribution positive for the second consecutive quarter, saw its overall revenue increase 113 per cent YoY to Rs 644 crore in Q3 from Rs 301 crore in the year-ago period.


Growing at a massive 103 per cent YoY in Q3, Blinkit’s GOV growth dwarfed that of Zomato’s food delivery business, which grew by 27 per cent during the same period.


Its gross order value (GOV), meanwhile, increased to Rs 3,542 crore, compared to Rs 1,749 crore a year ago and Rs 2,760 crore a quarter ago, largely driven by the increased volumes during the festival season.


The total number of orders in Q3 climbed to 55.8 million, from 45.5 million in the previous quarter, while monthly transacting users increased quarter-on-quarter (QoQ) from 5.4 million to 4.7 million.


The increased sale of products in categories such as electronics, festive needs, and home décor, among others, also resulted in higher average order values (AOVs).


Blinkit’s AOV for the quarter stood at Rs 635, versus Rs 607 in Q2.


Sustainable expansion


Although Blinkit’s dark store count increased QoQ from 411 to 451 in Q3, its average GOV per day, per store grew 17 per cent QoQ.


“In Q3FY24, close to 70 per cent of our stores were contribution positive and Rs 20 per cent of these were operating at an over 5 per cent contribution margin resulting in a growing pool of contribution profit,” Dhindsa said.


Moreover, the company’s new dark stores are reaching a volume of 1,000 orders per day – at which point stores typically start to achieve contribution break-even – within almost two months, much faster than the 5.8-month average in Q4 FY23.


This, in turn, cuts down on the amount of investment per store, paving the way for further store expansion without impacting the company’s adjusted EBITDA break-even timeline.


Most of the network expansion is limited to Blinkit’s top eight cities, which contribute to around 90 per cent of the firm’s GOV.

First Published: Feb 08 2024 | 11:12 PM IST



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