Zomato decided to narrow its target to three key areas of food ordering and delivery; delivery to restaurants through “Hyperpure” and fast-paced commerce, Kaushik Dutta, the company’s chairman, told shareholders on Tuesday.
During his first annual general meeting (AGM) since the disclosure, Dutta said the move was a part of a technique to focus “only on areas that have the potential to become meaningfully large businesses during a decade”.
In fiscal 2021-22, Dutta said the food major was ready to deliver strong top-line growth while keeping its “adjusted EBITDA under control” despite multiple challenges like disruptions thanks to the Covid-19 pandemic, macroeconomic uncertainty, and growing inflation , including fuel prices. Subsequently, he said Zomato will narrow its focus to a few key areas – food ordering and delivery; Hyper clean, and fast business. Zomato’s core business is stable and heading towards profitability, he said, adding that food delivery still features a lot of room for growth in India.
While the consumption of restaurant meals has increased within the previous few years, its overall penetration in India continues to be significantly low compared to its global counterparts, he opined.
On Hyperpure – Zomato’s restaurant supply platform for fresh items, he said the corporate is now seeing strong adoption of its services by restaurant partners.
“We believe this business has the potential to become as big or maybe bigger than our food delivery business because the addressable market here is potentially bigger than food delivery,” he added.
As for the short deal, he said the Blinkit acquisition was completed this month and therefore the integration of the 2 teams had begun.
Dutta said Zomato sees the fast-food business as a natural extension of its core food delivery business and increases its addressable market size. It has the potential to assist the corporate build a more profitable business by cross-leveraging the present customer base and increasing the utilization of the hyperlocal delivery fleet, he added.
“With this, we now have a transparent commit to executing these three businesses, and our team’s goal is to bring these businesses to meaningful scale and profits,” said Dutta.
He also said the corporate is making progress in its efforts to adopt electric vehicles, with around 4,500 active Electric Vehicle based suppliers and around 18 percent of orders delivered on bicycles as of March 2022.
On the security of delivery partners, he said it’s always been a priority for Zomato, and “no compromises are made and can not be made” while asserting that the platform doesn’t incentivize riders to air time.
Goyal also said that Zomato will put a signal on the luggage of its delivery partners in order that people can call and report if any of them are found speeding.
Follow and connect with us on Facebook, LinkedIn & Twitter.
