ETERNAL LIMITED

Sachin Salgaonkar

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Sachin Salgaonkar

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Sachin Salgaonkar

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Kunal Swarup

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Ankur Rudra

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Ankur Rudra

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Akshant Goyal

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Akshant Goyal

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Ankur Rudra

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Ankur Rudra

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So, that will be a short-term drag on the margins.

— Akshant Goyal

Or to put the same question in another way, if you look at last quarter, what could have been the drag from the new store additions on your contribution margins?

— Gaurav Rateria

In terms of your second question, I think the number of stores that we opened this quarter, I don't think it was a meaningful drag on the margins, because when we start the stores, some of them lie in the first bucket where we are opening in existing localities, but we don't think that the drag was meaningful.

— Gaurav Rateria

Is it the third-party sellers that are taking the inventory risk for us?

— Ashwin Mehta

As we are increasing more and more categories, I think part of our job is to also find the sellers and also convince the sellers to be able to take the risk to sell higher margin, but long tail products, which have a lower frequency.

— Ashwin Mehta

So far, we have not seen a meaningful change in risk profile for our sellers either, even when they are expanding into lower-margin categories, partly because we also help figure out with the brands, what should be the terms of trade that make the entire business viable for them even if the mix of non-grocery products is increasing.

— Ashwin Mehta

Q

Congrats for a great set of numbers. I have a few questions. First question, just wanted to understand the increase in food take rate, obviously, we've seen a sharp increase. I presume part of it is on the back of platform fees and part of it is on the back of organic take rate increases, that you guys are doing. Possible to help that breakout and a bit of an idea in terms of how should one expect that to move ahead?

Kunal Swarup

Yes, there is some increase and we can't share the split of the various components of that increase for competitive reasons, as you know, Sachin. But largely, introduction of the platform fee helped and slightly better performance on ad monetization also helped. Got it. And Kunal, while you guys were experimenting on the platform fee, is it now fair to assume to say that this is now here to stay, and this will continue? Look, we keep experimenting. But, yes, it (platform fee) is here to stay as of now. The quantum (of the fee) we'll keep experimenting and fine-tuning as we go along. Got it. Se

Q

Hi, thank you and again, congratulations for the quarter in terms of the profitability and the growth. Starting with questions on the food side, clearly, nice to see the monetization from platform fees, which seems to have helped your take rate to an extent. How do you think about user behavior as a combination of both the user delivery charges and platform fees? Do you think there is a limitation in terms of how much you can optimize this? Do users start thinking of the two together? Because obviously, the delivery charges have been falling because of your Gold program. But do you think this

Akshant Goyal

Hi Ankur. So, there are two things here. One, the platform charge right now is fairly nominal, so I don't think that it really shows up in any demand elasticity from a consumer standpoint. Also because the competition and other aggregators are also charging it, so we were a follower here. Even from a comparison standpoint, it is something that customers were already paying on the other platform, - one of our largest competitor. Hence, in this quarter, as we rolled out the platform fee, we have not seen a meaningful impact on demand elasticity. Understood. On the Blinkit side, again, good to se

Q

Congratulations. Great set of numbers again. My question is on the loyalty program pricing. Can you talk a little bit about how are you thinking about the pricing here, one can see that the pricing for renewals and new sign-ups keep changing. So, is it fair to say that competitive activity is currently focused mostly on the loyalty program side and how you think about gaining market share, meeting profitability, etc.? And also, obviously, your competitor has a slightly different loyalty program versus you. Is that aiding you in any way or in any form?

Akshant Goyal

Zomato Gold pricing is a business call, and it depends on various factors, including competition. Also, it is a fairly new program, so we are still discovering what is the right way of pricing it and learning with every passing month and quarter. So, we will keep doing that and as we mentioned in our letter, the idea is to make sure that we keep our service affordable for our customers and at the same time, create incentive for them be loyal to our platform. And so far, that is shaping up well. Thanks, Akshant, just related to that, thanks for that disclosure, which says share of the Gold GOV

Q

Hi, thanks for taking my questions. Most of my questions are around growth across food delivery in Blinkit. Now firstly, Akshant, just wanted to get a clarification. I think, in the shareholder letter, you've mentioned that you're expecting 25% to 30% YoY growth next quarter in the food delivery business. But you also said that it will be high single digit, and you called it moderate. So, I just want to understand, I mean, high single digit or 25%, 30% seems like a pretty good number. You're calling it moderate because you're not happy with that number and you think there's further upside to t

Akshant Goyal

No, I think we're calling it moderate because I heard a lot of people from sell side expecting a 15%, 20% growth in that quarter. So, we felt our business plan here is relatively moderate compared to what the sell side was expecting. So, we just wanted to call that out. Helpful. The second one, just again, maybe if you can give additional color, Albinder or Akshant on the Blinkit number, very strong growth this quarter, and you've mentioned that next quarter, you expect growth to remain high. So again, should we think about that in terms of the quarterly run rate that you've been doing in term

Q

Just a couple of questions. The first, where did the contribution margin improvement come from in the food business? Because it appears that the take rate improvement got more than offset by the increase in delivery cost?

Kunal Swarup

Gaurav, like we mentioned earlier in one of the questions, which was asked earlier as well. The incremental margin came in from things like platform fee and ad monetization. And that more than made up for the decrease in the delivery charges that you saw. My question was, wouldn't it already be part of your take rate.? My question was that the take rate increase after taking into consideration all of these revenues, have got more than offset by the increase in delivery cost. So, what are the elements that really drove the increase in contribution margin? So, the contribution margin has increas

Q

Thanks for the opportunity. So, my first question is with respect to the Gold orders. I would like to understand like on a per order basis, has there been any increase in investments that you do in Gold. Because my sense is that we saw some fluctuation in the Gold prices during the quarter, and there has been also some free membership rollouts through various tie-ups. So basically, on a per order basis, Gold order, does it have a higher dilutive impact on an absolute basis compared to the previous quarter, is the question?

Akshant Goyal

Swapnil we would not want to disclose that because I think it is part of the strategy of how we invest in growing the business. I would not want to share specific details to your question. But in general, I think what you've pointed out is that one, the overall Gold membership base is increasing for us. And two, the fact that Gold orders today are lower contribution margin than non-Gold, that is a fact as well. And third, I would say is that, going forward, I think, a part of our incremental margins from here on in the business will perhaps come from reducing the negative impact Zomato Gold or

Q

So again, congratulations on the numbers, really excellent performance. So, in terms of your platform fees, what would be the attachment rate as in what proportion of orders are you charging platform fees right now?

Akshant Goyal

All the orders now, almost 100% of the orders have a platform fee now. Perfect. In terms of the ad revenue monetization that you spoke about, how is that increasing? Is it on the basis of more restaurants advertising? Or is it that the existing restaurants are advertising more, or have you actually increased the realization, from per ad or per click. If you could help us understand that. Yes. In the last year or so, I would say a majority of the ad income increase has come as a result of more advertisers or more restaurants spending money on ads and a little bit of that is also because of the

Q

So, two questions. One, in terms of Blinkit, what portion of our dark stores are own versus franchisees? And how do you manage inventory in a scenario where non-grocery SKUs are increasing, where the frequency of sales will be lower. Is it the third-party sellers that are taking the inventory risk for us? And do we have more dedicated sellers, or these are sellers, which will be selling on other platforms as well? Albinder Singh Dhindsa: So, Ashwin, on the first part, I think the breakup ratio of our own versus partner is roughly the same as it has been historically. So, we operate roughly hal

Ashwin Mehta

Okay. Thanks, Albinder. Just one more in terms of, ad monetization as a percentage of GOV on Blinkit, any approximate sense on where we are and given that transaction models are gaining traction from an advertising perspective, where do you see a potential possibility of this going? Albinder Singh Dhindsa: So, I don't think we are providing any guidance on sort of what percentage of our revenue is coming from ads. However, like we mentioned in a letter a couple of quarters ago that we do have a programmatic ad bidding platform on Blinkit, which is used by most of the brands that are operating

Q

Thanks for the opportunity. I had a question on the transacting user base. Now you cited the 5% to 6% QoQ increase in transacting users, and it seems to have been aided by Gold. Now logically, pace of attachments to Zomato Gold over time should slow down. So do you think even in that scenario, this 5% to 6% QoQ growth in MTUs should be maintained?

Akshant Goyal

It is a very specific question, Garima, like overall, if you take a longer-term view on this, I mean, QoQ is hard to say, but I think the longer-term view on growth, as we mentioned in the letter and in response to one of the question also, is that majority of the growth should be driven by growth in MTU or MTC as we're calling it, monthly transacting customers. Given the fact that our current monthly user base is much smaller than the annual transacting user base. Now I don't think the pace of that change is going to be linear. There will be periods of time when either because of demographic

Q

So just one question from me. If you think of quick commerce versus food delivery, I think, we all understand that the overall addressable market in quick commerce is much larger. But on the competitive dynamic, would you also say that's a lot easier given that in a lot of pin codes, basically, you could be the only player. And even, would that be a fair statement to say that the competitive dynamic is much easier and likely to stay easier or that is incorrect? Albinder Singh Dhindsa: We don't think so, Aditya, because we also will have neighborhoods where there will be 4 or 5 quick commerce p

Aditya Soman

Fair enough, that's interesting. And in terms of benchmarking, in food delivery, it is fairly obvious who you could benchmark to or not. But would you say in quick commerce, as you mentioned, you could benchmark to everybody from direct quick commerce competitors to Amazon to Reliance or whoever? So, I don't think we benchmark to anybody because you could take a different point of view and start moving your business to that side. I think we are the category creators in this business. We are the largest quick commerce player, and I think it is our job to actually create this market. So, I don't

Q

My first question is regarding Blinkit. So, there is 35% quarter-on-quarter increase in fixed cost. Could you give some idea between brand marketing and costs associated with employee addition and wage increment? And how this relates to our dark store network expansion strategy in medium term?

Albinder Singh Dhindsa

I think this is mostly the base effect of disruptions in the previous quarter. So there were some fixed costs that we didn't have to bear because we were not operating for a week or so, and there were disruptions in the business for a longer period of time. So that's why you're seeing that increase, but the levels that we are at right now, these are the actual fixed cost levels that we generally operate at. Okay. And would we be adding more employees for the dark store expansion in the Blinkit side of things? I think we kind of have to, but that's above the contribution. Okay. Got it. And the