In an exclusive interview, Zomato CEO Deepinder Goyal shared his insights on the current state of India's food delivery sector, highlighting the multiple systemic issues that need to be addressed amid the larger slowdown in the industry.
Goyal emphasized the importance of cranking up growth priority for the food business while maintaining discipline for Blinkit, Zomato's quick commerce arm.
According to Goyal, the quick commerce industry is facing significant challenges, with a quarterly cash burn of Rs 5,000 crore. However, Blinkit is contributing only 2-3% to this burn, indicating that the company is taking a disciplined approach to its quick commerce business.
The Indian food delivery sector has experienced rapid growth in recent years, driven by the increasing demand for online food ordering and delivery. However, the sector is now facing a slowdown due to various factors, including increased competition, changing consumer behavior, and regulatory challenges.
Goyal's comments suggest that Zomato is focusing on sustainable growth and profitability, rather than pursuing aggressive expansion at the cost of burning cash. The company's disciplined approach to Blinkit is likely to be a key factor in its efforts to achieve profitability in the quick commerce space.
The news comes at a time when the Indian food delivery sector is undergoing significant changes, with companies like Zomato, Swiggy, and Ola struggling to balance growth with profitability. The sector's high cash burn has been a major concern for investors, and companies are under pressure to demonstrate a path to profitability.
Zomato's approach to the quick commerce space is likely to be watched closely by investors and industry observers, as the company navigates the challenges of the Indian food delivery sector. With its disciplined approach to Blinkit and focus on sustainable growth, Zomato is well-positioned to emerge as a leader in the quick commerce space.