Blinkit’s AOV declined 6% to INR 522 in Q4 FY23 from INR 553 in Q3 and INR 568 in Q2 FY23
The quick commerce vertical’s revenue rose nearly 21% QoQ to INR 363 Cr in Q4 FY23, adjusted EBITDA loss improved to INR 203 Cr in the quarter
Impact of driver protests fairly minimal, Blinkit now focused on going deeper in existing cities: CEO Albinder Dhindsa
It was another mixed quarter for Zomato-owned Blinkit as the quick commerce platform continued to chase lower losses amid a decline in average order value (AOV) in Q4 FY23. However, all other financial and operational metrics saw an uptick.
The quick commerce platform’s AOV declined 6% to INR 522 in the fourth quarter (Q4) of the fiscal year 2022-23 (FY23) from INR 553 in the previous quarter. Its AOV stood at INR 568 in the quarter ended September 2022.
Blinkit CEO Albinder Dhindsa blamed the less-than-cheerful AOV numbers on ‘multiple seasonal factors’. He, however, projected that the metric could see an uptick in the current quarter.
“We have learnt that the AOV in this business will continue to swing up and down in the near to mid term due to multiple (mainly seasonal) factors… Over time, as we get scale, we hope to be able to predict such swings better and mitigate the impact of these swings on our margins. We expect the AOV to increase QoQ (quarter-on-quarter) in the current quarter (Q1FY24),” said Albinder Dhindsa.
Meanwhile, Blinkit’s revenue surged nearly 21% to INR 363 Cr in Q4 FY23 from INR 301 Cr in the previous quarter.
Adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) loss improved to INR 203 Cr in the quarter from INR 227 Cr in Q3 FY23.
The quick commerce major’s gross order value (GOV) rose nearly 17% to INR 2,048 Cr in the quarter ended March 2023 from INR 1,749 Cr in the previous quarter.
Among other key metrics, the number of orders surged 25% QoQ to 3.92 Cr during the quarter under review, while average monthly transacting customers rose to 39 Lakh from 31 Lakh in Q3 FY23.
Average GOV per day, per dark store was around INR 6.25 Lakh mark in the quarter under review as compared to INR 5.24 Lakh in the December 2022 quarter.
Strikes, Scale & Hopes Of Trimming Losses
At the end of FY23, Blinkit’s dark stores covered a total space of 1.3 Mn sq. ft. and generated a quarterly GOV of INR 15,000 per sq. ft. in Q4 FY23. As per the company, some of its ‘mature stores’ already appear to be making quarterly GOV in excess of INR 30,000 per sqft.
“What makes our throughput per sqft so high? Three reasons primarily – most relevant and fast moving assortment, store design optimised for deliveries (more storage, less aisle space, efficient order checkout), and multiple replenishment cycles in a day,” elaborated Dhindsa.
While expansion of dark stores seemed to be on the company’s radar last quarter, Blinkit seems to have recalibrated its strategy. In its earnings call, the company said it is focused on going deeper in existing cities.
“Even in our largest city, which is Delhi NCR, we’re still nowhere close to being able to cover it, even 70%. So, I think our primary focus will be scaling up our existing cities in the near future and then we will look at expanding footprint,” said Dhindsa.
On the issue of protests that hit Blinkit earlier this year, Dhindsa said that the impact of the strikes was ‘fairly minimal’. He went on to claim that ‘in some places’, the effect of the strike lasted for less than two days. He added that the previous commission regime allowed some delivery executives to earn a lot more without putting in the same effort as the rest of the partners.
The Blinkit CEO also said that the login driver logins are yet to reach pre-strike levels. However, he refused to blame only the drivers’ strike for this. Dhindsa said the onset of summer is contributing to lower driver counts as people adjust to higher temperatures in northern India.
Overall, Zomato reported a consolidated net loss of INR 187.6 Cr in Q4 FY23, down 48% YoY from INR 346.6 Cr in Q3 FY23, despite muted growth in food delivery business.
Zomato said excluding Blinkit, its business turned adjusted EBITDA positive in Q4 FY23. The company said it also aims to turn the consolidated business profitable on an adjusted EBITDA basis within the next four quarters. It is also targeting posting a profit after tax within this timeline.
To achieve these goals, Goyal said Zomato is looking to increase profit in the food delivery business and trim losses of Blinkit.
It must be noted that on Thursday, Zomato’s rival Swiggy said it achieved profitability in its food delivery business as of March 2023 and made strong progress on the profitability of its quick commerce business, Instamart. It claimed that its quick commerce vertical is on track to hit “contribution neutrality” in the next few weeks.
Zomato released its financial statements after market hours on Friday. The company’s shares ended the session 1.72% higher at INR 64.54 on the BSE.