Zomato Faces Profit Decline Amid Expansion Efforts

India's leading online food delivery and restaurant discovery platform, Zomato, reported a significant 57% drop in its third-quarter profit. This downturn is primarily attributed to the aggressive expansion of its quick commerce platform, Blinkit, which has put considerable pressure on the company's margins.

Revenue Growth Despite Profit Slump

Despite the profit slump, Zomato's revenue from operations saw a notable 64% increase, reaching Rs 54.05 billion. This figure, however, slightly missed analysts' expectations of Rs 54.54 billion. The main food delivery business of Zomato experienced a growth of nearly 22% during the quarter.

Blinkit's Rapid Growth and Market Competition

Blinkit, Zomato's quick commerce platform, more than doubled its revenue as the company focused on expanding its presence by opening more stores and warehouses. Zomato has been intensifying its efforts by increasing discounts and offering free deliveries on Blinkit. Despite holding a 46% share of the quick commerce market, Zomato faces stiff competition from Swiggy’s Instamart, start-up Zepto, and giants like Walmart-backed Flipkart and Tata Group-backed BigBasket.