Blinkit Surpasses Zomato in Quick Commerce

Siffatjot Singh

Goldman Sachs reports that Blinkit's valuation has surpassed Zomato's food delivery service, reaching $13 billion—a six-fold increase since March 2023. This rise is backed by Blinkit's 103% growth in gross order value in the last quarter of 2023 and expectations to achieve EBITDA breakeven by Q4 FY24. Consumer sentiment strongly favors Blinkit, reflecting in Zomato's stock price uplift and optimism about its quick commerce strategy in India's burgeoning $150 billion market.

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Introduction

The e-commerce landscape in India is witnessing a phenomenal transformation, led by rapid shifts in consumer behavior and technological advancements. One of the most striking tales of this change comes from the quick commerce sector, where Blinkit has recently outshined Zomato's core food delivery service in valuation, according to a recent report by Goldman Sachs.

The Rise of Blinkit: A Quick Commerce Phenomenon

In what could be termed a significant shake-up in the Indian e-commerce space, Blinkit, a quick commerce giant, has now surpassed the valuation of Zomato's traditional food delivery business. Goldman Sachs places Blinkit’s valuation at a staggering $13 billion, marking a six-fold increase from just a few months prior in March 2023. This leap is not just in numbers; it reflects a profound shift in market dynamics and investor confidence

Growth Metrics that Matter

The robust growth trajectory of Blinkit is evident from its Gross Order Value (GOV), which saw a monumental year-on-year increase of 103% in the December 2023 quarter. This explosive growth is a clear indicator of Blinkit's effective strategy and its resonance with consumer needs for speed and convenience.

Financial Horizons: The Path to Profitability

Goldman Sachs projects a bright financial future for Blinkit, with expectations to hit EBITDA breakeven by the end of Q4 FY24. This milestone is particularly noteworthy as it not only underscores operational efficiency but also sets the stage for Blinkit to potentially surpass Zomato’s food delivery business in EBITDA margins by FY30.

Consumer Sentiment and Market Impact

The report highlights positive consumer sentiment towards Blinkit, bolstered by findings from Inc42 and Clootrack that rank it highest in favorability among competitors. This strong consumer approval translates into increased market trust and potentially, a higher customer lifetime value.

The Broader Industry: Quick Commerce in India

Goldman Sachs estimates the addressable market size for quick commerce in India's top 50 cities at about $150 billion as of 2023. This suggests not just a substantial market opportunity but also intense competition and innovation, driving companies like Blinkit to continuously refine and enhance their service offerings.

Conclusion

The quick commerce sector is at the forefront of redefining retail in India, and Blinkit’s recent achievements are a testament to the sector’s vibrancy and potential. As Goldman Sachs revises its price target for Zomato by over 40%, reflecting heightened optimism, the future looks promising for both Blinkit and the broader quick commerce ecosystem. The ongoing developments in this space will undoubtedly be crucial for market observers, investors, and competitors alike.