The co-founder and CEO of Zomato, Deepinder Goyal recently highlighted the rationale behind the company’s acquisition of Blinkit (formerly Grofers) for USD 568 million in 2022.
Speaking at the ET Startup Awards in Bengaluru, Goyal added that without this move, Zomato might not have a future in the next decade.
Need of Last-Mile Delivery
Goyal referred to the Blinkit acquisition as a “survival instinct,” pointing out that it was an important step needed for enhancing Zomato's last-mile delivery capabilities.
He further added that that entering the quick commerce sector was not just a choice but an essential step to ensure the company's survival.
“Getting into last-mile delivery was something we needed to do to survive,” he said.
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He further speaking at the event noted that companies with large fleets of delivery partners, like Blinkit, can easily shift into food delivery.
However, he also added out the difficulties food delivery faces in entering the quick commerce market.
“Food delivery is only 10 percent as hard as Blinkit,” Goyal noted, referring to the complexities of managing the food supply chain.
While some think and discuss Zomato's vision regarding the Blinkit deal, Goyal noted during the event that the decision was stemmed from immediate market pressures. “In hindsight, people can talk about our strategy, but we did what we had to do to survive,” he stated, pointing out the harsh realties companies might face in the rapidly changing world of food delivery and e-commerce.
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He also during the event addressed the misconceptions about quick commerce affecting traditional retail.
He clarified that Blinkit and similar companies do not significantly impact local kirana stores or large retailers like DMart. Instead, they are mainly competing with online retailers, including Amazon and Flipkart.