Zomato has reported a loss of ₹347 crore in the quarter ending December 31, 2022, as compared to a loss of ₹251 crore reported in the previous quarter. 

This loss was against an operational revenue of ₹1,948 crore in Q3 FY23, as compared to ₹1,661 crore in Q2 FY23 and ₹1,112 crore in operational revenue in Q3 FY22. The company said that its adjusted revenue has grown 66 per cent year-on-year to ₹2,363 crore (45 per cent year-on-year growth excluding quick commerce and 30 per cent year-on-year growth for food delivery).

Zomato’s adjusted EBITDA loss (ex-quick commerce) was ₹38 crore for the quarter, compared to ₹272 crore in Q3FY22 a year ago. After consolidating Quick Commerce (a business that didn’t exist last year), the adjusted EBITDA loss was reduced to ₹265 crore as compared to ₹272 crore in Q3FY22 a year ago.

CEO’s message

Zomato highlighted that its business pre-acquisition of Blinkit has turned EBITDA positive for the month of January 2023, despite a slowdown in the food delivery business. CEO Deepinder Goyal responded to the slowdown in food delivery business in the shareholder letter and said, “We have seen an industry-wide slowdown in the food delivery business since late October (post Diwali). This trend has been seen across the country, but more so in the top 8 cities. As a result, GOV growth in food delivery in Q3FY23 was only 0.7 per cent QoQ in an otherwise seasonally strong quarter. Orders declined QoQ while AOV (average order value) grew. On a YoY basis, GOV grew 21 per cent driven by order volume growth of 14 per cent along with 6 per cent growth in AOV.”

He added that it remains a challenging demand environment, but the company has started seeing green shoots of demand coming back in recent weeks, which makes it believe that the worst may be behind us. Further talking about the company’s plans to revive growth, Goyal said, “We continue to stay focused on our long-term growth vectors without worrying too much about near-term growth pressures. The team is executing relentlessly, and we are shipping things faster than ever. Few initiatives that we are prioritising for growth”

New Launches

In terms of new launches, Zomato launched a membership programme, Zomato Gold, in late January. This programme is expected to drive loyalty and a higher frequency of ordering on the platform going forward. The programme comes with features like On-Time Guarantee, Intercity Legends (intercity delivery from legendary restaurants), priority access to more restaurants during peak times, and free delivery on orders meeting certain criteria. Till now, the Zomato Gold program has scaled to 900k+ members.

Zomato is also remodeling its Instant service (10-minute food delivery offering) to focus on offering customers home-style cooked meals at affordable prices. This product will be called Zomato Everyday and is planned to be launched in the next few weeks.

On multiple senior-level exits at the company, Goyal said, “Company building is not just about the journey of the business. It is also so much about its people’s personal journeys. Both these journeys take their own twists and turns. And sometimes, for some people, the distance between their form (their mindset and skillset) and the company’s context becomes such that it is necessary to take a break from each other. I attempt to stay true to a culture where I expect every individual, including me, to continuously learn and grow, improve upon their form, and adapt to the changing context.”

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