Zomato adex shoots by 39% to Rs 521 crore in Q3FY25

On a quarterly basis, the ad expenditure for the  food delivery platform increased 19%, from Rs 421 crores in the quarter ending in September to Rs 521 crores in the quarter ending in December

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New Delhi: India’s food delivery platform, Zomato, on Monday reported a 39.3% increase in advertisement expenses to Rs 521 crore in the December quarter of the current fiscal year, up from Rs 374 crores in the corresponding quarter of the previous year. 

On a quarterly basis, the ad expenditure for the food delivery platform increased 19%, from Rs 421 crore in the quarter ending in September to Rs 521 crore in the quarter ending in December. 

The company has spent Rs 1,338 crore on advertising and sales promotions so far in the current fiscal. By the end of Q3 last fiscal, it had spent Rs 1,043 crore, with total spending amounting to Rs 1,432 crore in FY2024.

The food tech unicorn reported a 57.2% drop in consolidated net profit for the December quarter to Rs 59 crore, with its margins facing pressure due to aggressive store expansion to meet orders from its quick-commerce platform Blinkit.

The company had earned a net profit of Rs 138 crore in the year-ago period.

The company's consolidated revenue from operations stood at Rs 5,405 crore, as against Rs 3,288 crore in the December quarter of the previous financial year.

Notably, Zomato witnessed a 2% quarter-on-quarter and 17% year-on-year growth in food delivery, driven by a broad-based "demand slowdown", it said in a letter to shareholders.

However, during the quarter under review, Zomato's total expenses also shot up to Rs 5,533 crore, from Rs 3,383 crore in the corresponding period of 2023-24.

The revenue-reporting segments for the group include India food ordering and delivery; hyperpure supplies (B2B business); quick commerce; Going out; and All other segments (residual).

The combined gross order value for the company's consumer-facing (B2C) businesses, including the food delivery, quick commerce and going out segments, registered a 57% year-on-year growth and stood at Rs 20,206 crore during the reporting quarter.

In a letter to shareholders, the company shared that the Blinkit store count crossed 1,000, one quarter ahead of plan. It now aims to double the number to 2,000 by the end of the year, one year ahead of the earlier guidance of December 2026.

"The losses in our quick commerce business this quarter are largely on account of pulling forward the growth investments in the business that we would have otherwise made in a staggered manner over the next few quarters. As of now, it seems like we will get to our target of 2,000 stores by December 2025 much earlier than our previous guidance of December 2026," Zomato Founder and CEO Deepinder Goyal said.

Blinkit Founder CEO Albinder Dhindsa shared that the quick commerce business is increasingly finding product-market fit in India.

"Strong customer adoption is giving us the confidence to bring forward our store expansion plans, and acquire customers faster for existing and new stores," he said.

On how the sudden surge in competition in the quick commerce space has impacted the business, Albinder said the "heightened competition has led to a pause in margin expansion in the business, which is expected and should be temporary. So far, we have not seen any attrition of our core customers which tells us that customers are continuing to choose Blinkit over other options".

On Zomato's foray into 10-minute food delivery via Bistro by Blinkit, Deepinder said it was launched targeting the large in-office market wanting quick access to snacks, meals, and beverages within 10-15 minutes, a market that is currently addressed by on-site vendors/vending machines and is not catered to evenly across geographies by the existing food delivery options.

"Bistro is working to solve this by creating infrastructure and working with food researchers, producers, chefs, and restaurants to provide a proof of concept. If we manage to find product-market fit and profitability, our hope is that this platform could be replicated by different restaurants and cuisine types where demand exists.

"We have also recently launched a quick delivery feature where we are enabling restaurants listed on Zomato to offer 15-mins delivery by curating their menu items and providing a dedicated delivery fleet. This is currently live in select locations and will be scaled over time," the Zomato CEO said.

expenses revenue ad spends advertising Zomato Blinkit quick commerce
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