Zomato Unfazed By Blinkit Store Closure & Workers' Strike, Sees No Financial Impact

Blinkit Delivery Partners’ Strike To Have No Material Impact On Financial Performance: Zomato

SUMMARY

Zomato said that the disruption of service due to the strike of delivery partners of Blinkit will have less than 1% impact on the company’s revenue

While some stores were shut down to ensure safety of employees, most of these stores have now resumed operations: Zomato

Blinkit’s delivery partners in Delhi-NCR have been on a strike since April 12 after the quick-commerce company slashed the delivery fees to INR 14 per order from INR 50 earlier

The ongoing strike of Blinkit’s delivery executives in the Delhi-NCR region and the temporary closure of hundreds of dark stores since last week will have no material impact on the operations/ financial performance of Zomato, the foodtech company said on Wednesday (April 19).

Responding to clarification sought by the exchanges on the strike of the driver partners of its quick-commerce vertical, Zomato said that the disruption will have less than 1% impact on the company’s revenue.

“Over the last few days we have made changes in the delivery partner payout structure with respect to the Blinkit business to address the needs of delivery partners, improve customer experience and reduce cancellation/ order rejection frauds by few delivery partners in the system. Such changes are done from time to time, as needed,” said Zomato.

“We had to shut down some stores for a few days to ensure safety of our employees at stores and the delivery partners. Most of these stores have now resumed operations,” it added.

Following the clarification, shares of Zomato jumped as much as 4.8% to INR 55.9 on the BSE during the early trading hours.

Blinkit’s delivery partners have been on a strike since April 12 after Zomato’s quick-commerce platform slashed the delivery fees to INR 14 per order from INR 50 earlier. The incident led to a temporary shutdown of over 50% of Blinkit’s dark stores in the Delhi-NCR region. The quick-commerce app displayed a message saying that the service was ‘temporarily unavailable’.

On Monday, Blinkit delivery executives met Gurugram Deputy Labour Commissioner Dinesh Kumar, demanding a minimum pay of INR 25 per delivered order.

Meanwhile, several dark stores of Blinkit have now resumed operations in parts of Delhi.

Earlier this week, brokerage ICICI Securities said that the service disruption would lead to a 1% revenue loss to Blinkit in Q1 FY24.

Blinkit, which was acquired by Zomato in August last year, weighed heavily on the foodtech giant’s Q3 FY23 financial performance, adding to its loss. Meanwhile, adjusted revenue from the quick-commerce vertical surged 27% quarter-on-quarter to INR 301 Cr in Q3 FY23. Overall, Zomato’s consolidated net loss widened on a year-on-year (YoY) as well as QoQ basis to INR 346.6 Cr in the December 2022 quarter.

Shares of Zomato ended about 1% higher at INR 53.89 on the BSE today.

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