Eternal CEO Deepinder Goyal said that the company does not see the path to profitability for Quick and Zomato Everyday without compromising on customer experience
He said that the current restaurant density and kitchen infrastructure is not set up for delivering orders in 10 minutes, and this leads to inconsistent customer experience
Overall, Eternal’s consolidated net profit crashed 77.8% YoY to INR 39 Cr in Q4 FY25 due to a rise in loss of Blinkit
“We did not see any incrementality in demand while we ran Quick as an experiment for a few months,” Eternal CEO Deepinder Goyal said while announcing the company’s decision to pull the plug on Zomato’s quick food delivery vertical Quick.
To note, the shutdown of the vertical comes within three months of the launch of the 15-minute food delivery service. In the pilot phase for Quick, Zomato did not see any incrementality in demand.
Goyal elaborated that the current restaurant density and kitchen infrastructure isn’t set up for delivering orders in such a short timeframe, leading to inconsistencies in customer experience.
Besides, the foodtech company also shut down its homely-meal service, Zomato Everyday. For this offering, Zomato didn’t see a use case beyond office locations in metro cities, thus limiting the return on investment to only a small scale operation.
Overall, Goyal highlighted that Zomato didn’t see a path to profitability “without compromising on customer experience” for the offerings.
Zomato Everyday was the rechristened version of Zomato Instant, launched in 2022 with 10-minute delivery promise in Bengaluru and Delhi-NCR. It was shut down in January 2023.
On the other hand, Zomato launched Quick in January this year to offer ready-to-eat meals from restaurants within 1.5-2 km radius. It trailed competitors Swiggy and Zepto in foraying into the 10-minute food delivery space, which is seemingly working well for both the aforementioned players.
For instance, Zepto CEO Aadit Palicha claimed that Zepto Cafe hit 1 Lakh orders per day earlier in February, along with almost achieving $100 Mn annualised gross merchandise value (GMV) run-rate with a near 50% steady-state gross margin.
Meanwhile, Swiggy’s Bolt contributed about 9% of Swiggy’s food delivery revenue in Q3 FY25, up from 5% in November 2024.
It is pertinent to note that while Zomato shut down its Quick offering, Blinkit-operated Bistro continues to operate within the Gurugram region. However, the company didn’t specify Bistro’s progress in its Q4 shareholders’ letter.
Zomato’s Sluggish Q4
Eternal posted lacklustre Q4 numbers, with its profit shrinking by about than 78%. The company continued to see a slowdown in the food delivery vertical. While Zomato’s adjusted EBITDA went up 56% YoY to INR 428 Cr, its adjusted revenue rose only 17% to INR 2,409 Cr.
In terms of delivery numbers, average monthly transacting numbers grew to 20.9 Mn during the quarter from 20.5 Mn in the preceding December quarter. Net order value (NOV) growth also remained subdued at 14% YoY, well below the 20% YoY growth guidance.
The company highlighted shortage of delivery partners, cannibalisation of its food delivery vertical by quick commerce, and sluggish demand as the key reasons behind the slowdown in the segment.
Confirming recent speculations, Zomato informed that the company’s food delivery CEO Rakesh Ranjan has stepped down from his position after a two-year stint. Goyal has replaced him for the time being till the company formalises its next set of leaders.
