ETERNAL LIMITED

Garima Mishra

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Garima Mishra

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Garima Mishra

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Gaurav Malhotra

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Gaurav Malhotra

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Gaurav Malhotra

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Gaurav Malhotra

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Akshant Goyal

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Akshant Goyal

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Akshant Goyal

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So, is it more of the ongoing festive season and the ongoing different sales which everyone is doing, or is there an increased competitive pressure which you are seeing right now?

— Gaurav Malhotra

The full impact of that change will appear in the December quarter and outside of that, as we’ve also mentioned in the letter, we expect a slow uptick in growth rate in the near term and there is no silver bullet that we have as of now.

— Akshant Goyal

So, just to be clear, this is the position on the impact of business model change on the top-line and the margin.

— Akshant Goyal

Q

Hi, thank you for the opportunity. My questions are on the quick commerce business. First, this quarter witnessed a big increase in MTU addition for Blinkit. You did allude to higher ad spends and investments towards this in the letter. Is this set to continue, and hence should we expect elevated ad spends going forward as well? Albinder Singh Dhindsa: Hey Garima, this is Albinder. What we are seeing right now is that there are new consumers out there in the market, and if we are targeting them, we are able to onboard them at a reasonable marketing cost which is why we spent more on marketing

Garima Mishra

All right. So, in the same line, in the last quarter, you mentioned that every new customer cohort breaks even for you at CM level in month one itself. Is there any change to this metric, especially since MTU addition has gone up so much? No. We haven't seen that change yet, Garima. Just to add to Albinder's point earlier, Akshant this side, as long as we see a healthy CAC and a healthy LTV, we won't shy away from spending more on marketing because we're actually acquiring good quality customer base. So Akshant, just on this point, is this strategy a sort of change or modification, whatever yo

Q

Hi, good evening, everyone. I just have two to three questions. So first, when I see the NOV to GOV for quick commerce, that has sort of moved up, I think moved down by a couple of percentage points. So, is it more of the ongoing festive season and the ongoing different sales which everyone is doing, or is there an increased competitive pressure which you are seeing right now? Albinder Singh Dhindsa: Gaurav, it's mostly because of the change in mix of products. So, JAS quarter has a couple of festivals, Rakhi being a big one. That is one of the reasons that you will see the difference being th

Akshant Goyal

And Gaurav, just to add directionally, as the share of general merchandise and non- branded products on the platform grows, we are likely to continue to see this trend and therefore you can see in our data that we have shared over the past four quarters, this metric has sort of consistently come down which means NOV is a smaller and smaller percentage of GOV, which is also why we highlighted that we believe NOV is a more relevant metric to track versus GOV. Got it. Just following up on what Garima said and sort of linking it up with the 3,000 stores you've now given us and by when you want to

Q

Hi, thanks for the opportunity. My first question is on food delivery. Last quarter we called out that we'll focus on driving growth, and profitability will remain constant. But this quarter what we are seeing is that profitability actually improved while growth pick up is limited. So, just wanted to understand, was there some change in strategy or the elasticity of, let's say, additional spend is not leading to higher growth?

Akshant Goyal

Hi, Nikhil. So, the main delta here is increase in platform fee that happened in the middle of the quarter, which we did not anticipate or estimate at the beginning of the quarter, when we declared the last quarter's result. And our increase in platform fee was more of a reaction to what our competitor did. So, that's why you see the growth in margin versus our earlier guidance of margin perhaps remaining flat. No, I understand that part. The point, what I want to understand is, let's say if you would have invested those additional earnings to acquire more users or gain more market share, we c

Q

Yeah. Hi, good evening. So, two questions. Firstly, on Blinkit. So, you indicated that you've sort of ploughed back some of the incremental contribution, if you were to call it that, or incremental profitability back into marketing spend, and would it also be fair to assume that some of it has gone into price as well to make your products on the platform more attractive?

Albinder Singh Dhindsa

Yes, that was the first point in one of the answers. In point 1 of question 7, essentially that's what we mean there. Absolutely. So then when I see the difference, obviously contribution per order has improved, but EBITDA per order hasn't, and that, would just be a function of marketing spend and the gap between those two? It is an interplay between some gains in operating leverage and increased marketing expenses, yes. Understood. Very clear. That was on Blinkit. And second question on District. Any sort of guidance on how you see the trajectory for sort of contribution or profitability play

Q

Hi. Good evening. Thank you for taking my questions. First question is, again, a follow-up on food delivery. Now, since you mentioned that some of the factors that are causing headwinds are largely macro, in your opinion, for you to reach your medium term mark of 20%+, is it just that macro has to get better, or are there any other interventions that, you could do to get to that higher number? And, since one of the reasons that you called out is also expansion of quick commerce which may have impacted food delivery growth, so, could we conclude that as long as quick commerce growth remains ele

Akshant Goyal

That's right, Manish. That's how I would also characterize the current situation. In terms of your first part of the question, whether we're totally macro-dependent, or can we do something else for growth, it's not like that those attempts to expand the market have not been done in the past, but the headwinds have been strong, including the soft discretionary demand in India in the last few months. But from our side, we'll continue to focus on creating newer use cases to order food from restaurants and hope that the macro environment improves, which will bring growth back in the business to th

Q

Hi, thanks for the opportunity. I have two or three questions. First, on your store expansion strategy and related to that. So obviously, you have mentioned that you plan to operate around 2,100 stores by the December quarter and 3,000 by March 2027. Now, if I were to just extrapolate that and ask you, what would happen to your NOV growth because you had earlier guided for 100% NOV / GOV growth this year, but, the kind of accelerated investments that you're doing on store side, will it be fair to assume that, we could be at a very, if not 100%, but close to 100% kind of a growth rate on NOV in

Akshant Goyal

Yes, Swapnil, I agree. Currently if you look at the growth rate, it's much higher at 137%. So, I do expect the year-on-year growth to remain above 100% for the next one or two years at least. Got it. And the second question is with respect to your contribution margin not improving meaningfully, despite the fact that your gross margins expanded 300 basis points and then you alluded to the fact that there is some first mile-related investments that you have done. Now, my question over here is if you're getting into those first mile, at some point of time, you will also probably see some benefits

Q

Yeah, hi. Thanks for the opportunity. Just one question. So, Akshant, we've added almost 1,200 odd dark stores over the last year. Any sense that we can give either over the last two quarters, or the last four quarters in terms of, where these dark store additions have happened. What's the proportion towards tier 1, tier 2, tier 3, and is the skew towards, say, tier 2, tier 3 increasing in the recent times?

Akshant Goyal

Hi Ashwin. So, more than 70-75% of our store addition continues to be in the top 10 cities. While the number of city count seems to be exploding, but number of stores in these long tail cities is really small. So, majority of the business and the success of the business is still linked to how well we do in the top 8 to 10 cities, and that remains the focus. Okay. So, do you envisage, as you possibly densify some of these tail cities as well, that the middle mile or the warehousing related expenses also start to kick in? At this point in time if we are just kind of testing waters here, then may

Q

Hi, sir. Thanks for the opportunity. My first question is with regard to the new MTU additions which have happened in this quarter. You mentioned that you've got some high-quality customers. So, are these new customers in the segment or are they coming from one of your competitors? Albinder Singh Dhindsa: Abhisek, it's hard for us to clearly demarcate where the new customers are coming from. We just know whether they're new to platform or not. But for the majority of the customers that we're talking about, we believe they would be new to quick commerce in general because one, we have the large

Abhisek Banerjee

Got it. So, you also mentioned that the steady state proportion of in-sourcing will be about 90% rate inventory. Now, what is the 10% that you are kind of keeping outside? Are they fast-moving items or the slow-moving items? Any color on that? So, Abhisek, there are some categories where it's operationally easier for us to work with sellers than actually directly source it from the manufacturer. There are no large categories there, but actually a bunch of small products and SKUs that just operationally don’t make sense for us to own directly and that's why we're going to let sellers run that b

Q

Yeah, hi. Thank you for the opportunity. My first question is, the take-rate commentary that you have, the 300 bps QoQ, nearly half of it seems to be coming from that first mile change. I wanted to understand if the majority of the rest came from advertising. There has been a lot of industry commentary recently, around FMCG companies significantly raising advertising budgets on QC. I'm just wondering if that is true and if you've reinvested those advertising revenues into customer acquisition? Is that a reasonably accurate way of looking at this?

Akshant Goyal

So, Vijit, what we're saying is that a large part of this 3 percentage point increase is on account of business model change. However, this business model change is also leading to costs going up. First mile cost is only a part of the reason of for costs going up. So, when we move this business from sellers to directly on our platform, the supply chain cost, which includes first mile cost, went up and hence that entire gain on the top-line margin because of the model change did not flow through to contribution margin, which is also consistent with what we’ve mentioned in the past that the net

Q

Yeah. Hi. Thanks for taking my questions. And first of all, Akshant and team, I think, a great job in terms of executing on a lot of variables. As customers, we don't see the difference in terms of delivery when you would have migrated 80% or 90% of the system, I think. It's a great job on that front. I just have three questions. So, the first one is any idea you would have on the quick commerce side of the business? Let's say, how would your market share be versus let's say three or six months back on NOV basis, then versus now?

Akshant Goyal

Hi Manish. Thank you. We do internally have a sense on market share. We do try and track it basis some sampling data that we do, but we're not sure about it because all our competitors are private companies. So, I would not want to conjecture on, therefore, numbers around market share, unless they're public. Okay, and my understanding was that there is marketing intensity given you said that on the earlier question that your M3 retentions are good on the quick commerce side. I thought the marketing intensity of peers is going down, so your marketing cost or this CAC should come down. But this