Zomato focuses on food delivery, hyperpure and fast trading

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Online food delivery platform Zomato has decided to focus on three key areas of food ordering and delivery; supplies restaurants through “Hyperpure” and fast trade, company chairman Kaushik Dutta said on Tuesday.

In his speech to shareholders at the company’s annual general meeting, Dutta said the move was part of a strategy to focus “only on areas that have the potential to become significantly significant businesses ten years from now. “.

In FY22, he said Zomato was able to achieve strong revenue growth while keeping its “Adjusted EBITDA burn” in check, despite multiple challenges such as disruptions due to the Covid-19 pandemic, macroeconomic uncertainty, rising inflation, fuel prices, among others.

This year, after thinking about strategic priorities as a business, given the size and scale of the current platform, Dutta said it was decided that the focus would be solely on areas that have the potential to become large, significant companies ten years from now.

Afterwards, he said Zomato would focus on three key areas: ordering and delivering food; Super pure and fast trading.

Zomato’s core food delivery business is stable and heading towards profitability, he said, adding that food delivery in India still has a big avenue for growth.

While food consumption in restaurants has increased over the past few years, its overall penetration in India is still very low compared to its global counterparts, he explained.

On Hyperpure – Zomato’s sourcing platform for fresh produce restaurants, he said the company is now starting to see strong adoption of its services by restaurant partners.

“We believe this business has the potential to become as big or even bigger than our food delivery business because the addressable market here is potentially bigger than food delivery,” he added.

On the quick trade, he said the acquisition of Blinkit was finalized this month and the integration of the two teams has begun.

In June this year, Zomato had announced the acquisition of Blink Commerce Pvt Ltd (formerly known as Grofers) for Rs 4,447.48 crore in a share swap as part of its growth strategy. fast trading investment.

Dutta said Zomato sees fast commerce as a natural extension of its core food delivery business and increasing its range of addressable markets.

It has the potential to help the company grow a more profitable business by leveraging existing customer base and increasing the use of the hyperlocal delivery fleet, he added.

“With that, we now have a clear execution plan around these three businesses and our focus as a team will be to bring these businesses to meaningful scale and profit,” Dutta said.

He also said Zomato’s restaurants and some other segments saw revenue drop 15% in FY22, due to the shutdown of most of its international operations as well as some non-core businesses. The catering business was negatively impacted in FY22 by the Covid-related lockdowns.

He also said the company is making progress in its EV adoption efforts with around 4,500 active EV-based delivery partners and around 18% of orders delivered by bike in March 2022.

In response to questions from shareholders, Zomato Founder and CEO Deepinder Goyal said the company does not plan to make any further strategic minority investments in the foreseeable future as it has made all necessary investments for its future projects. .

Regarding the security of delivery partners, he said it has always been a priority for Zomato and “no compromise has been or will be made here”, while asserting that the platform does not incentivize passengers to to be on time.

Goyal also said Zomato will put a phone number on its delivery partners’ bags so people can call and report if one of them is speeding.

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