Zomato’s chief executive officer Deepinder Goyal on Monday said that its quick commerce platform, Blinkit, could become bigger than the parent company’s food delivery business in a year.
Speaking at the ‘Startup Mahakumbh’ event at Bharat Mandapam, New Delhi, Goyal said that, for a company to survive in the long run, it must disrupt itself.
“For instance, right now we have a business plan competition going on within the company, which will focus on offering funds to a small team, which will come up with a plan to disrupt the businesses that we are in right now. That could lead to Zomato version 5 or Blinkit version 2. Blinkit is a part of Zomato version 4, and in one year’s time, Blinkit could be bigger than Zomato,” he said.
— Startup Mahakumbh (@StartupMhakumbh) March 18, 2024
Blinkit’s growth outpaced that of Zomato’s core food delivery business in the third quarter (Q3) of financial year 2023-24 (FY24). Its gross order value (GOV) grew 103 per cent year-on-year (YoY) in Q3, compared to 27 per cent GOV growth in food delivery.
Meanwhile, food delivery at the end of Q3 FY24 had a revenue of Rs 2,025 crore, and Blinkit clocked Rs 644 crore.
“None of the business models that are being created right now will last beyond a decade because with all the tech and distribution systems that are changing. You have to innovate and create new businesses from the outcomes you’ve created so far if you want to last longer,” Goyal emphasized.
Goyal claimed that it is harder to create a generational company today than a few decades ago because of technology.
“In any business, there will be a change. So, as soon as we start saying that nothing will change, we are dead,” he added.
Quick commerce, till a few quarters back was considered to be cash burn businesses and many thought that many players would get out of it.
But players like Zepto, Blinkit and Instamart have scripted another story.
To build a successful long-term business, Goyal said that the most important moat is having good company culture.
Sharing an instance when the company was struggling to conserve cash amid the COVID-19 pandemic, Goyal said: “When we asked our entire team to take voluntary salary cuts, we didn’t force it on anyone. About 80 per cent of the team decided to take voluntary salary cuts. That’s building a strong culture. Culture is the only long-term moat. You may say the product is the moat, or the distribution is the moat. None of these are moats because they will not last long.”
Goyal further stated that, since inception, Zomato has faced several existential situations.
“We had the right team, we took the right calls, we had the right amount of patient capital, and we had the right near-death situations which forced us to scale.” he said.
