Blinkit, Zomato’s quick-commerce arm, turned contribution positive in Q2FY24 for the first time ever. In Q2FY24, Blinkit’s contribution margin, as a percentage of Gross Order Value (GOV), improved to 1.3 percent, from -7.3 percent in Q2FY23, when Zomato had acquired the company.
To be sure, Blinkit had achieved this feat for the month of June but it is the first time it has turned contribution positive in a quarter.
After turning contribution positive in June, Blinkit can deliver adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) break even in four quarters, Zomato had said in Q1FY24.
Blinkit’s adjusted EBITDA margin, as a percentage of GOV, also improved to -4.5 percent in Q2FY24 from -17.5 percent in Q2FY23. “Our adjusted EBITDA margin should only improve which is why we have guided for a break-even by Q1FY25,” said Albinder Dhindsa, CEO of Blinkit.
ALSO READ: Zomato logs 2nd straight quarter of profit at Rs 36 crore in Q2, revenue up 71%
In the three months to September, Blinkit’s GOV increased to Rs 2,760 crore from Rs 1,482 crore in the same period last year, registering a growth of 86 percent year-on-year (YoY).
Even the average order value (AOV) jumped from Rs 582 to Rs 607 in Q2FY24, largely because of high value items like iPhones and others.
“While ordering frequency of these (electronics, toys etc) categories is lower, their ASP tends to be 3-4x higher than other categories, thereby driving up AOV,” CEO Dhindsa said.
Banking on the festive season, Blinkit expects another bumper year.
ALSO READ: Zomato expects 'moderate' sequential GOV growth in Q3
“We have also seen festivals driving much stronger growth for quick commerce as compared to food delivery. With major festivals like Navratri, Dussehra, Diwali etc. lined-up in the December quarter, we expect another high growth quarter from Blinkit,” Akshant Goyal, CFO, Zomato said.
Blinkit seems to be staging a turnaround. Its revenues grew from Rs 236 crore in FY22 to Rs 724 crore in FY23, a 207 percent growth YoY. The sharp growth was coupled with a marginal movement in losses which widened from Rs 1,021 crore in FY22 to Rs 1,190 crore in FY23.
Blinkit also added a net addition of 28 new stores during the September quarter, which has now increased the overall store count to 411 stores. In line with its expectations, Blinkit will end March 2024 with around 480 stores in total.
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