At a time when competitive intensity in India’s rapidly-growing quick commerce segment is rising, Eternal – the parent of market leader Blinkit and food delivery giant Zomato – will continue to expand aggressively even if its at the cost of short-term profitability, Chief Financial Officer Akshant Goyal said on May 1.
“Our view is that competition is going to intensify further from here in the near term…We will aggressively look to grow our market share, especially in the face of heightened competition, and will not let any short-term profitability goals come in the way of that,” CFO Goyal said in a letter to shareholders after Q4FY25 results were announced.
Blinkit reported a massive 381 percent on-year (YoY) rise in earnings before interest, taxes, depreciation, and amortisation (EBITDA) loss of Rs 178 crore in the March quarter on account of rising investments in marketing, and expanding dark store footprint.
The quick commerce unit added as many as 294 new stores in Q4FY25, making it Blinkit’s highest-ever net store addition in a single quarter. Its dark store count increased from 526 during the same period last year to 1,301 in Q4FY25.
The aggressive expansion led to a 122 percent YoY increase in revenue at Rs 1,709 crore for the quarter ended March, while gross merchandise value (GOV) increased to Rs 9,421 crore compared to Rs 4,027 crore in the year-ago period.
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Blinkit's CEO Albinder Dhindsa said while most of the metrics are favourable, Eternal was unable to expand margins, hinting at continued competitive intensity. Blinkit’s average order value (AOV) declined to Rs 665 in Q4FY25, down from Rs 707 in the previous quarter, and Rs 617 in the year-ago period.
In addition, the consumer tech player’s marketing efforts has led to an increase in customer acquisition. The average monthly transacting customers for Eternal increased to 13.7 million in Q4FY25, up from 10.6 million in Q3FY25.
Margin expansion, especially in the more mature parts of Blinkit’s network, could have been higher if not for the heightened competitive intensity, the company’s leadership indicated.
Eternal’s management expects high competition in the near term, not just from quick commerce rivals, but also from traditional, next-day delivery e-commerce players like Flipkart and Amazon.
“This (quick commerce) is the largest consumption category in the country and beyond just the early quick commerce players, we will continue to see competition from next day delivery companies as they invest more in faster deliveries, especially in non-grocery categories,” Goyal said while hinting at increased heat from legacy e-commerce players such as Amazon and Flipkart.
"Their next-day delivery business is shrinking in terms of the delivery timelines. On Amazon and Flipkart, you can see that a lot of products are actually delivered on the same day in 4-6 hours. That is also, in some ways, going to compete with the quick commerce business that we have," Albinder Dhindsa, CEO, Blinkit told analysts.
As for now, the market leader continues to be focused on improving customer experience with a more consistent delivery, category expansion, and increasing footprint – both in terms of stores and nationwide supply chain.
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