Zomato may face competition from e-commerce giants such as Amazon and Flipkart as it considers expanding its 10-minute delivery service, Blinkit, to include a wider range of product categories.
According to a report by the Economic Times, Zomato intends to venture into the rapidly expanding direct-to-consumer (D2C) market by establishing its own supply chain to procure branded products directly and oversee inventory management.
The food delivery platform is in the process of expanding its quick commerce operations. It has engaged in discussions with individual brand owners across different categories to secure inventory, according to sources cited in the report. This initiative is perceived as a potential catalyst for long-term growth. The company wouldn't own any inventory directly but would oversee the product flow for D2C brands.
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Zomato has rented warehouses in New Delhi and Mumbai to bolster Blinkit's e-commerce expansion. Apart from its primary food delivery and quick commerce segments, Zomato also ventures into B2B grocery supply through Hyperpure and operates in the event ticketing segment with Zomaland. Analysts have started shifting their focus towards Blinkit as Zomato's major growth entity, particularly as growth in its core business slows down.
Zomato and Swiggy are both seeking diversification. The latter had introduced its e-commerce platform Minis, last year. Meanwhile, Zomato aims to leverage hyperlocal warehouses and expedited delivery schedules through Blinkit to compete against established players like Flipkart and Amazon, according to sources. By expanding into new categories, particularly in D2C, Blinkit is set to increase its average order value (AOV), which has significantly contributed to the company's revenue growth and loss reduction.
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