Homegrown food delivery platform Zomato, on Tuesday, during its first annual general meeting (AGM) since going public, revealed that it's business-to-business (B2B) supplies vertical ‘Hyperpure’ could be as big as or even bigger than its food delivery business. The company also informed that it focuses on growing its top line and reassured shareholders about its path to profitability.
Kaushik Dutta, chairman of Zomato, during his address to shareholders at the company's AGM, said that the company has decided to narrow its focus on three key areas - food ordering and delivery, supplies to restaurants through 'Hyperpure' and quick commerce.
Dutta, while talking about Hyperpure - Zomato's supply platform for restaurants for fresh items, said the company is now starting to see strong adoption of its services by restaurant partners.
“We think that this business has the potential of becoming as large or even larger than our food delivery business because the addressable market here is potentially larger than food delivery,” he added.
Deepinder Goyal, founder & CEO of Zomato, while replying to shareholder queries, said the company does not expect to make any other strategic minority investments for the foreseeable future as it has made all the investments that are needed for its future plans.
In FY22, Zomato achieved strong top line growth while keeping its "adjusted EBITDA burn under control" despite challenges such as Covid-19 disruptions, rising inflation, fuel prices and macroeconomic uncertainty.
Zomato’s revenue from operations for Hyperpure increased 40 per cent to Rs 272.7 crore in the first quarter of FY23, from Rs 194.2 crore in the previous quarter. On the other hand, for the entire FY22, Hyperpure’s adjusted revenues stood at Rs 540 crore, as against Rs 4,760 crore from Zomato’s food delivery business.
Zomato chairman Dutta, after reflecting on the strategic priorities as a company in 2022, given the platform’s current size and scale, said the move was part of the strategy to focus "only on areas that have the potential to become meaningfully large businesses ten years from now."
Zomato’s overall penetration in India, despite the increase in restaurant food consumption in the past few years, is still significantly low as compared to its global counterparts, said Dutta.
Dutta, on the acquisition of Blinkit, said the acquisition was completed this month and the integration of the two teams has started. Zomato, in June 2022, announced the acquisition of Blink Commerce Pvt Ltd. (formerly known as Grofers) for Rs 4,447.48 crore.
Dutta said Zomato considers quick commerce as a natural extension to its core food delivery business and increases its addressable market manifold. He added that quick commerce also has the potential to help Zomato build a more profitable business by cross-leveraging its existing customer base and increasing hyperlocal delivery fleet utilisation.
Dutta said, "With this, we now have a clear execution plan around these three businesses and our focus as a team will be to get these businesses to meaningful scale and profits"
(With inputs from PTI)