Zomato’s quick commerce division, Blinkit, has reported a significant rise in its financial losses for the first quarter of 2023. The Ebitda loss soared to ₹178 crore, marking a staggering 381% increase compared to the ₹37 crore loss recorded during the same period last year. This increase in losses also reflects a sequential rise from the ₹103 crore loss in the previous quarter, driven largely by Blinkit’s ambitious expansion strategy.

Blinkit’s Aggressive Expansion Strategy

In this quarter alone, Blinkit opened an impressive 294 new dark stores, the highest number added in a single quarter, bringing the total store count to 1,301. This aggressive growth is part of Blinkit’s strategy to solidify its presence in the quick commerce sector.

• 40% of these stores have been opened in the last two quarters.
• Many of these locations are currently underutilized, according to CEO Albinder Dhindsa.

Investment in Marketing and Customer Growth

To bolster this rapid expansion and enhance customer acquisition, Blinkit has significantly increased its marketing expenditures. In a letter to shareholders, Dhindsa noted, “The rise in losses was anticipated and aligns with our strategy to expedite expansion.” He emphasized that the company is focused on boosting brand visibility to attract new customers.

Financial Highlights

Despite the growing losses, Blinkit recorded a remarkable 122% increase in revenue, reaching ₹1,709 crore year-on-year. The Gross Order Value (GOV) also surged, climbing to ₹9,421 crore from ₹4,027 crore a year ago, and up from ₹7,798 crore in the previous quarter.

• The Average Order Value (AOV), however, saw a slight decline, dropping to ₹665 in Q4, down from ₹707 in Q3 but still higher than ₹617 a year ago.
• Monthly active users nearly doubled, jumping to 13.7 million from 6.4 million the previous year, showcasing a growing customer base.

Conclusion

As Blinkit continues to expand its footprint in the quick commerce market, the company remains focused on strategic investments and marketing initiatives to enhance customer engagement. While the financial losses are a concern, the significant increase in revenue and user base highlights the potential for future growth in this competitive sector.