Can Blinkit become bigger than parent Zomato? Here's what Zomato CFO Akshant Goyal believes is possible

Blinkit has the potential to become larger than Zomato's food delivery business in the next 3-5 years, Akshant Goyal, Chief Financial Officer of Zomato told CNBC-TV18 in an interview. While still a relatively new business, Blinkit is experiencing rapid growth with its top line doubling year-on-year, he said.

Zomato has achieved profitability at a consolidated level, reporting profits in both June and September quarters of 2023. Goyal acknowledged criticisms about the food delivery business but highlighted its continued profitability and growth.

In June last year, Zomato had approved the acquisition of Blinkit for Rs 4,447 crore in an all-stock deal.

He further said that Zomato will need to maintain its profitability while investing in Blinkit's growth and the competition in the food delivery and quick commerce space is fierce, requiring constant innovation and adaptation.

Highlighting that Blinkit is growing rapidly with its annual gross order value (GOV) exceeding Rs. 10,000 crores, he said that despite being only 1.5 years old, Blinkit maintains an impressive 80-100 per cent year-on-year growth rate.

Currently, the food delivery business has a GOV of Rs. 30,000 crores and is expected to grow at a rate of 25-30 per cent annually, he said.

While pointing out that Zomato's ambition for Blinkit is to achieve a 4-5 per cent margin in the long run, he said that the company is not there yet, but margins are expected to increase as the business scales.

He further said that delivery fees, advertising, and other revenue streams contribute to profitability and believes that the profit margin of Blinkit can be similar to modern retail businesses in the long run.

Zomato CTO acknowledged the vast Indian retail market with diverse formats and players. He emphasises that Zomato is not directly competing with any specific format but rather focuses on solving user problems and creating value propositions.

Goyal highlighted the immense potential of the offline retail market, estimating a $10 billion business opportunity for Zomato with just a 1 per cent market share. Zomato's current market share is estimated to be one-tenth of this potential, indicating significant room for growth.

Goyal also expressed his optimism about the future of tech listings in India. He believes that despite the large presence of foreign tech giants like Google and Facebook, a wave of new, homegrown companies are poised to enter the public markets.

He predicted the increased listings from emerging companies in the digital space, especially those with strong business models and improved financial performance. Shetty cited the successful listings of several companies in 2021 as evidence of growing interest in Indian tech companies.

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