Blinkit Sees Decline In Market Share In Delhi NCR

SUMMARY

In a post earnings call, Zomato founder and CEO Deepinder Goyal said that Blinkit’s market share in Delhi NCR has declined to 40% from about 47% a couple of quarters ago

Goyal explained that while the initial focus was on strengthening the presence in Delhi NCR, the company is now expanding and focusing on other markets

The CEO said that Blinkit is the largest player in terms of GOV in all the major metros, except Chennai and Hyderabad

Zomato’s quick commerce arm Blinkit is witnessing a decline in its market share in Delhi NCR, as the company has been working on bolstering its presence in other metro cities.

In a post earnings call, Zomato founder and CEO Deepinder Goyal said that Blinkit’s market share has declined to 40% from about 47% a couple of quarters ago.

Goyal explained that while the initial focus was on strengthening the presence in Delhi NCR, the company is now expanding and focusing on other markets. This strategy also seems to have started showing results for the company.

“By gross order value (GOV), we believe we are the largest player in all the major metros outside of Chennai and Hyderabad,” said Goyal.

Highlighting the need to consider the number of stores that can be opened in a city, Goyal said that the number of cities may not be the best indicator of market depth at this point.

“Opening one store in a city means we have launched in that city, but we are still just scratching the surface in terms of the overall market potential. This is a hypothesis we need to test.”

Goyal emphasised that Zomato’s focus remains on expanding its footprint while exploring newer markets with different demographics to evaluate the effectiveness of their business model.

Talking about the profitability of quick commerce, Goyal said that the business could achieve an EBITDA margin of 4-5%. “With each passing quarter, this target seems increasingly realistic and achievable,” he added.

It is pertinent to note that Blinkit has emerged as a major growth driver for Zomato over the last few quarters. In Q2 FY25, the quick commerce vertical’s revenue more than doubled year-on-year to INR 1,156 Cr. Besides, Blinkit was close to break-even during the quarter, as its adjusted EBITDA loss stood at INR 8 Cr.

Addressing concerns regarding capital expenditure, Goyal said, “In addition to the 152 stores we opened (during the quarter), we also added seven new warehouses, which has contributed to the notable increase in our capex.”

Blinkit is targeting a total dark store count of 2,000 by the end of FY26.

Overall, Zomato posted a 30% quarter-on-quarter decline in net profit to INR 176 Cr in the September quarter (Q2) of the financial year 2024-25 (FY25).