Zomato – Blinkit deal: The online delivery platform is fastly developed business in the market. All the delivery partners are delivered the online orders to customer doorstep with accurate time.
10 minute grocery delivery:
A few days before zomato acquisition of Blinkit for10-minute grocery delivery formerly Grofers. Zomato planning to invest $100 million in blinkit on within year for 9.3% stake to merge with the online grocery company in an all-stock deals.
Blinkit is going on cash crunch issue, the competition of quick commerce model is increasing day by day in this space. So on March 16, zomato food delivery platforms extended a $ 150 million loan to blinkit to support capital requirements in their near team.
This $159 million loan amount is foundation of zomato planning to invest $400 million in quick commerce in India over the next two years. The startup of Grofers is rebranded into Blinkit in December, entering on 10-mintue grocery delivery of quick commerce segment.
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What is Quick commerce?
The quick commerce is the unique business model in the industry, who are to place an order of goods or services for their requirement is to be delivered within 10-30 minutes.
What is behind zomato plan to buy blinkit?
Zomato have fantastic idea to become a strategic investor of e-commerce segment and the small start-up stakes are picked up by the zomato. While zomato says food related business likes food delivery, pizza delivery, dining-out and B2 delivery unit are key focus of our business. The food delivery businesses are going to very down so planning to improve the ecosystem of food delivery business.
In the last year, zomato invest the $225 million worth of cash to the Blinkit, Magicping and Shiprocket to build quick e-commerece businesses over the India.
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But, zomato has still a loos-making company in India.
In past three years zomato has increased stage of their average order value at Rs 400, but he own words says showing the early signs of maturity to the food delivery business.
In 2019 zomato has 15% of negative value of Gross orders but now it has 1.1% of orders although this is the huge improvement of contribution for food delivery business. In EBITDA level, zomato has calculated as 5% of contribution to the food delivery business at current scale. Whatever, zomato will fund the growth of food businesses till they become profitable.
Zomato has already said it ready to spend more capital into the hyperlocal e-commerce companies in which is taken monitory interest and it has to be leading a high potential merger in the future. But the time frame between zomato first investments in blinkit is stocked package. This is the mark able to the starting of the consolidation in India’s ultrafast grocery delivery business.