Zomato turnaround story with Blinkit

Zomato’s turnaround story with Blinkit involves transforming a struggling quick commerce platform into a key growth engine, leveraging Zomato’s resources and market reach to achieve profitability and market leadership.

Here’s a more detailed look:

The Acquisition and Initial Context:

In 2022, Zomato acquired Blinkit (formerly Grofers) in an all-stock deal for approximately $568 million, a move that was initially met with some skepticism.
Blinkit was facing challenges in the competitive quick commerce space, including cash-strapped issues and layoffs.
Zomato, meanwhile, was looking to expand beyond food delivery and tap into the growing quick commerce market.

Synergy and Transformation:

Zomato leveraged its existing infrastructure, including its delivery network and customer base, to support Blinkit’s growth.
Blinkit focused on enhancing its delivery speed, expanding its product range, and improving customer experience.
Zomato’s technological prowess helped Blinkit optimize its operations and estimate peak demand for food and groceries, enabling cross-utilization of resources.
Blinkit also launched a standalone app, Bistro, for 10-minute food deliveries, to compete more closely with Zepto Cafe, Swiggy’s Instacafe/Bolt and others.

Key Results and Achievements:

Blinkit has become a major growth driver for Zomato, with its Gross Order Value (GOV) soaring significantly.
Blinkit’s revenue has also seen substantial growth, with the company reporting adjusted EBITDA positive in March 2024.
Blinkit’s success has helped Zomato’s stock price rally, demonstrating the value of the acquisition.
Blinkit’s expansion plans include opening 2,000 dark stores by the end of 2026.
Zomato has also infused fresh capital into Blinkit, further demonstrating its commitment to the quick commerce business.
Zomato’s broader strategic shift is also evident, as its quick commerce arm Blinkit has become the key growth engine of the company.
Beyond food delivery, the company has expanded its portfolio to include B2B food supply through Hyperpure and curated dining and events via District.

Story and history of Zomato

Zomato’s journey is a compelling story of how a simple idea evolved into a major player in the global food technology industry. Here’s a breakdown of its history:
Early Beginnings (2008):

Foodiebay:
Zomato originated as “Foodiebay” in 2008.
It was founded by Deepinder Goyal and Pankaj Chaddah, who were working at Bain & Company in New Delhi, India.
Initially, it started as an online restaurant directory, aiming to simplify the process of finding restaurant menus and information.
Evolution and Expansion:
Rebranding to Zomato (2010):
In 2010, Foodiebay rebranded as Zomato.
The company began to expand its services and geographical reach.
Global Expansion:
Zomato rapidly expanded its operations to various cities across India and then internationally.
It ventured into countries in the Middle East, Southeast Asia, Europe, and North America.
Diversification of Services:
Zomato evolved from a restaurant discovery platform to a comprehensive food technology company.
It introduced services such as online food ordering and delivery, table reservations, and a loyalty program (Zomato Pro).
Acquisitions:
Zomato made strategic acquisitions to strengthen its position, including the acquisition of Urbanspoon in 2015, which helped it enter the North American market.
Also the later acquisition of Uber eats india, which increased its delivery foot print in india.
IPO (2021):
In 2021, Zomato went public with an initial public offering (IPO) on the Indian stock exchanges.
Key Milestones:
Transitioning from a restaurant directory to a food delivery giant.
Aggressive global expansion.
Adapting to the evolving digital landscape and consumer preferences.
Diversifying its business model to include buisness to buisness sales with hyperpure.
Zomato’s story is one of innovation, adaptability, and ambitious growth, reflecting the dynamic nature of the technology and food service industries.

Zomato future plans

Based on recent reports, Zomato’s future plans are heavily focused on expanding its quick commerce segment, primarily through its Blinkit platform. Here’s a summary of their key strategies:

Blinkit Expansion:
Zomato is aggressively expanding its Blinkit quick commerce business.
A major goal is to significantly increase the number of Blinkit stores, with aims to reach a large number of stores within the next couple of years.
The focus is on deepening its presence in top-tier Indian cities.
They are working to improve the efficiency of the quick commerce supply chain.
Focus on Profitability:
While pursuing growth, Zomato is also emphasizing achieving sustainable profitability.
They are working on optimizing operations to control costs.
Growth in Quick Commerce:
Zomato anticipates large growth in gross order value through the expansion of their quick commerce stores.
Continued Growth in Food Delivery:
While quick commerce is a large focus, Zomato also plans to continue growth in their core food delivery business.
In essence, Zomato’s strategy involves a dual focus: aggressively expanding its quick commerce footprint while maintaining a strong foundation in its food delivery business, all while striving for improved profitability.