Zomato Q3 Concall Highlights: Quick Commerce, Food Delivery, and Blinkit Updates 2025

Rahul Chaudhary

6 months ago

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Zomato Q3 Concall: Key Highlights and Updates

Zomato Q3 Concall: Key Highlights and Updates

Overview of Quick Commerce

The third quarter results of Zomato provide insights into its quick commerce business. Below are the main points discussed in the Q3 concall:

Impact on Take Rate: The variation in take rates from one quarter to another is primarily due to changes in the product mix. A higher proportion of electronics and general merchandise sales impacted these figures.
Profitability Goals: Zomato is optimistic about improving profitability in quick commerce. This confidence stems from the growing maturity of its stores and an increase in the pace of new store additions.
Maturity Timeline: A significant number of stores are expected to reach maturity by the fiscal year 2026. This milestone will likely strengthen the company’s position in the market.
Expansion Focus: While the company continues to expand into new cities, the majority of its new stores are being established in cities where Zomato already operates. New city additions contribute to profitability but represent a smaller portion of the overall expansion strategy.

Updates on Food Delivery

Zomato also shared updates about its core food delivery business:

Growth Slowdown: The company is experiencing a slowdown in food delivery growth. However, this decline is not linked to competition from 10-minute delivery services. Zomato believes such services have not significantly impacted its business.
Seasonality and Trends: The company attributes part of the slowdown to seasonal factors. It is cautious about making predictions regarding the recovery of food delivery growth.
Long-Term View: Zomato is not overly concerned about recent performance dips in food delivery, emphasizing that these trends do not indicate long-term challenges.

Blinkit Performance and Strategy

Blinkit, Zomato’s quick commerce venture, was another focal point during the Q3 concall. Key insights include:

Order Value and Competition

Average Order Value (AOV): Blinkit’s AOV is expected to increase in the upcoming quarters, driven by festivals and competitive pressures.
Break-Even Timeline: New stores generally reach the break-even point of 1,000 orders per day within 2-3 months. This timeline has remained consistent.

Network Expansion

Impact of Densification: The expansion of the store network in some cities may affect the throughput of existing stores. This is an anticipated consequence of network growth.
Investment Plans: Zomato expects to increase investments in Blinkit over the next one or two quarters. This will likely lead to higher absolute losses in the short term, but it’s seen as a necessary step for long-term growth.

Market Share Stability: Despite rising competition, Zomato has maintained or grown its market share in quick commerce. This reflects the company’s strong position in the market.
No Loyalty Programs: The company has no plans to introduce loyalty programs or offer discounts to retain customers. Instead, it focuses on sustainable growth models.

Operational Approach

10-Minute Delivery Models: Zomato is exploring different approaches to 10-minute delivery. This includes curated menus and dedicated fleets.
Marketplace Commitment: The company remains committed to the marketplace model for quick commerce and has no plans to shift to an inventory-led model.

Cost Dynamics

Higher Customer Acquisition Costs: In markets where Zomato enters after competitors, customer acquisition costs are relatively higher. However, the company views this as a necessary expense to establish its presence.
Loss Drivers: Most losses stem from expansion-related activities, including the addition of new stores and scaling up existing ones.
Profitability in Top Stores: Profitability levels in the top 300 dark stores remain stable, indicating that the core operations are not negatively impacted by competitive pressures.

Tracking Metrics

Focus on GMV Market Share: Zomato does not track order market share but monitors gross merchandise value (GMV) market share. The GMV market share has remained steady, despite heightened competition.

FAQs About Zomato Q3 Concall

What is the primary reason for changes in the take rate?

The take rate has shifted due to a higher percentage of electronics and general merchandise sales in the product mix.

Why is Zomato confident about quick commerce profitability?

The company’s confidence stems from the maturity of its stores and the acceleration of store additions. Many stores are expected to mature by FY 2026, boosting profitability.

How long does it take for a new Blinkit store to break even?

On average, new Blinkit stores achieve the break-even point of 1,000 orders per day within 2-3 months.

Does Zomato plan to introduce loyalty programs?

No, the company has no plans to offer loyalty programs or discounts. It is focused on sustainable growth strategies instead.

What is Zomato’s approach to 10-minute delivery?

Zomato is exploring curated menus and dedicated fleets for its 10-minute delivery services. It remains committed to the marketplace model and does not plan to shift to an inventory-led model.

How is Zomato handling competition in quick commerce?

The company has maintained or grown its market share despite increasing competition. It continues to focus on expanding its network and improving operational efficiency.

Conclusion

Zomato’s Q3 concall highlights its focus on sustainable growth across both quick commerce and food delivery segments. The company remains optimistic about its long-term prospects despite short-term challenges like rising competition and seasonal fluctuations. With strategic investments in Blinkit and a commitment to maintaining market share, Zomato aims to solidify its position in the evolving food delivery and quick commerce markets.