(Reuters) -India’s Zomato reported a 57% fall in third-quarter profit on Monday as its margins continued to face pressure from increased spending on opening more centres to fulfil orders at its Blinkit quick commerce platform.
Its consolidated net profit fell to 590 million rupees ($6.8 million) in the quarter ended Dec. 31, from 1.38 billion rupees a year ago.
Zomato’s revenue from operations rose 64% to 54.05 billion rupees, slightly below analysts’ average estimate of 54.54 billion rupees, per data compiled by LSEG.
Revenue in the food delivery business increased nearly 22% in the quarter, while revenue from Blinkit, the market leader in India’s quick commerce space, surged more than two-fold.
While Blinkit is growing faster than food delivery, it faces fierce competition from rival Swiggy’s Instamart, start-up Zepto and deep-pocketed rivals such as Walmart-backed Flipkart and Tata Group-backed BigBasket.
Zomato, which has a market share of around 46% in the quick commerce segment, has ramped up discounts and free deliveries, while investing in expanding the number of ‘dark stores’ and warehouses, used to ship orders in urban centers.
($1 = 86.5600 Indian rupees)
(Reporting by Ananta Agarwal and Ashna Britto in Bengaluru; Editing by Eileen Soreng)
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