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Zomato pilots grocery delivery on its app through Blinkit in Delhi-NCR

While the minimum order value for free grocery delivery on the Blinkit app for the Delhi-NCR customers was being shown as Rs 150, the amount was Rs 49 only on the Zomato app

August 27, 2022 / 07:55 PM IST

Zomato has started piloting grocery delivery on its app through an integration with the quick commerce company Blinkit, which the Gurugram-based food aggregator acquired recently

The option to order groceries on the Zomato app appeared for customers in Delhi and its neighbourhood, also known as the National Capital Region (NCR), but not for those in Bengaluru or Mumbai on August 27. While the minimum order value on the Blinkit app was Rs 150 for availing orders at zero delivery fees, the amount was Rs 49 only on the Zomato app.

The grocery category on the Zomato app also showed items from Colgate-Palmolive under a "sponsored" tag, indicating ad monetisation on the platform like other e-commerce companies.

"Blinkit tab in Zomato app is currently a pilot running at few locations for a small set of customers. We will share more details on this in due course," said a Zomato spokesperson in response to a set of queries regarding the integration roadmap sent by Moneycontrol.

This is Zomato's third attempt to crack the grocery segment. It first try was during the Covid lockdown of 2020 but the demand waned once the restrictions were eased.

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The company gave groceries another shot in mid-2021 ahead of its market debut only to junk it a couple of months later after making a $100-million investment in Grofers, which is now Blinkit.

Zomato founder Deepinder Goyal had earlier said that ad sales revenue in quick commerce would be higher than food delivery, given the much larger digital ad spend budgets of the consumer packaged goods (CPG) brands.

Zomato said on June 24 its board had approved the acquisition of Blinkit for Rs 4,447 crore. According to the terms of the agreement, Blinkit shareholders would get a cumulative stake of 6.88 percent in Zomato and the company’s leadership team, including co-founder and CEO Albinder Dhindsa, would stay on.

But questions still remain about how Zomato, a company that registered losses of Rs 1,223 crore in FY22, plans to derive value from acquiring another loss-making delivery startup.

Moneycontrol has reported that Blinkit launched a printout service in Gurugram, charging Rs 9 a page for black and white printing and Rs 19 for coloured printouts.

“Quick commerce will help us increase the customer wallet share spent on our platform and also drive higher frequency and engagement from our customers,” Goyal had said while explaining the rationale behind the deal.

The company believes that quick commerce naturally extends across multiple categories including beauty & personal care, electronics, OTC pharma, stationery, other gift items, etc. Also, categories other than grocery help the quick commerce business make higher margins, and attain higher average order value.

“Total commerce market in India is $1.3 trillion and in the long term, we see quick commerce emerging as a significant channel of demand for customers at least in the top cities,” Goyal had said.

In early August, Zomato said Blinkit delivered an estimated 8.3 million orders in July. This was a 63 percent increase from the 5.1 million orders it delivered in January, which was the first month of its operation after the pivot. During this period, its revenue rose around 239 percent to Rs 75 crore in July.

Blinkit’s annual turnover in FY22 was Rs 263 crore, Rs 200 crore in FY21 and Rs 165 crore in FY20.
Deepsekhar Choudhury Deepsekhar covers tech and startups at Moneycontrol. Tweets at @deepsekharc
first published: Aug 27, 2022 04:35 pm
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