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On a sequential basis, the foodtech company saw its revenue rise 9 per cent from Rs 1,024 crore in the September quarter (Q2), whereas net loss slimmed by 85 per cent from Rs 430 crore in Q2.
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Blinkit has scaled up to around $450 million annual run rate of gross merchandise value (GMV) and now operates with more than 400 dark stores across 20 cities in India. All of the former grocery delivery company’s business now is in quick commerce format with a median delivery time of around 12 minutes.
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Food delivery health
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Gross Order Value (GOV) grew by 84.5 per cent YoY and 1.7 per cent QoQ to Rs 5,500 crore in Q3FY22. “We believe that the weak QoQ growth in GOV was primarily due to reduction in customer delivery charges, in addition to a soft impact of post-covid reopening (including some shift from delivery to dining out),” said the company.
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“Over the years, unit economics in our food delivery business have improved with scale. Contribution margin (as a percentage of GOV) has improved steadily from –15 per cent back in 2019 days to 1 per cent today. Around a 5 per cent contribution margin in our food delivery business (at the current scale) should get us to EBITDA break-even as a company (covering all common corporate costs as well),” said Deepinder Goyal, CEO and founder of Zomato, in a blog post.
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Number of orders grew 93 per cent YoY (year on year) and 5 per cent QoQ (quarter on quarter). Average order value (AOV, which includes customer delivery charges) shrunk by around 3 per cent QoQ, mostly on account of reduction in customer delivery charges. Meanwhile, customer delivery charges de-grew by 22 per cent. This was driven by Rs 7.5 per order reduction in customer delivery charges in Q3FY22 as compared to Q2FY22.
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According to the company, part of the reduction in customer delivery charges is also because it started operations in around 180 new cities (the company is now in a total of more than 700 cities), where it has introduced temporary free delivery to cultivate a culture of ordering food from restaurants.
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“We re-distributed our growth investments more in favour of discounts on customer delivery
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charges vis-a-vis food coupons. We are seeing higher return on investment with discounted delivery charges as compared to coupons. As a result, discounts per order reduced by Rs 5 per order in the last quarter as compared to Q2 of FY22,” said Goyal.
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The company’s B2B supplies business – called Hyperpure – saw a rise in revenue of 168 per cent YoY and 40 per cent QoQ to Rs 160 crore in the December quarter. The service is now present in nine cities and supplied to over 27,000 unique restaurants in the third quarter – up 50 per cent from the September quarter.
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