Business
Did Zomato buy Blinkit to offset its losses from online food delivery?

Online food delivery platform Zomato, which saw its stock tumbling below its IPO price as India reopened and retail food industry came back on track, had acquired quick-commerce grocery delivery platform Blinkit for a whopping Rs 4,447 crore (about $568 million). Will this acquisition change its future prospects?
Zomato already owned more than 9 per cent stake in Blinkit (earlier Grofers). While the earlier Blinkit deal was valued around $700 million, the drop in Zomato’s share price reduced it to $568 million.
Zomato’s stock is hovering around Rs 70, after sliding to nearly Rs 50 (it opened at Rs 76 during its mega IPO last year).
According to market experts, Zomato is facing severe cash flow problems as its operational cost is running quite high.
Zomato Founder and CEO Deepinder Goyal said on Friday that he is not getting into the quick commerce market because growth in food delivery is now saturating.
“Food delivery has a long runway ahead. In FY22, our Adjusted Revenue grew by 109 per cent over FY21 and we expect healthy growth to continue going forward,” he noted.
According to him, quick commerce is a natural extension of Zomato’s food delivery business.
“How is it a natural extension? Because it is also a hyperlocal business, just like food delivery. And, because it also caters to a need for quick delivery of products for our customers. Quick commerce will help us increase the customer wallet share spent on our platform and also drive higher frequency and engagement from our customers,” he said in a company statement.
Zomato has grown at a CAGR of 86 per cent in the last four years to an adjusted revenue of $710 million “while the adjusted EBITDA margin has improved from (153 per cent) in FY19 to (18 per cent) in FY22”.
The acquisition came as the quick commerce (10-minute delivery) segment is brewing with new hope as people prefer groceries and other home essentials at their doorsteps within no time after making an online order.
Startups like Swiggy Instamart, Zepto and Reliance-backed Dunzo, among others, are trying to defy the current slowdown, as they add more goods and daily essentials to their kitty and deliver them to their customers.
In December 2021, Swiggy announced to pour $700 million into Instamart.
Last month, 10-minute delivery platform Zepto raised $200 million, taking its valuation to around $900 million.
India’s quick commerce market is all set to witness 15 times growth by 2025, reaching a market size of nearly $5.5 billion, according to Bengaluru-based market research firm RedSeer.
The total addressable market for quick commerce in India stands at $45 billion, and urban areas are driving this market on the back of mid-high-income households.
According to Akshant Goyal, Chief Financial Officer, Zomato, their food business is trending towards profitability faster than what they hadAthought at the time of the IPO last year.
“The timeframe for overall Zomato profitability does not change in our minds. In fact, we believe we will now get to profitability within the same timelines (as we thought last year) but with a much larger addressable market. We are also not envisaging any furtherAcapital raise to get to profitability in this timeframe,” he said.
Goyal said that as a food company, “we are already tapping into the large food delivery opportunity in India”.
“Customers (and data) are clearly signalling the macro trend that people are moving to unplanned and spontaneous purchases. To add to this, monthly order frequency on Blinkit app was 3.5x in May 2022, which is higher than that of food delivery on Zomato,” informed Goyal.
Blinkit’s gross order value (GOV) is fast catching up with Zomato’s GOV in some key markets, therefore indicating that quick commerce will add a significant new addressable market to our business in the long term.
“In a sample market like Gurugram, Blinkit GOV is already 63 per cent of Zomato’s food delivery GOV,” Goyal added.
Quick commerce naturally extends across multiple categories including beauty and personal care, electronics, OTC pharma, stationery and other gift items, among others.
The company said it will keep the Blinkit app and brand separate from Zomato.
“We will explore ways in which Blinkit can benefit from Zomato’s large customer base (and vice versa in the long term). Post the deal closure, we are going to start experimenting with various ideas that we have and see which all bear fruit, including having the Blinkit tab on the Zomato app,” the company said.
Exclusive
Calcutta HC allows NGO to distribute relief material in communal violence-hit Murshidabad

Kolkata, April 17: A single-judge bench of the Calcutta High Court, on Thursday, permitted a non-government organisation (NGO) to visit the communal violence-hit Murshidabad and distribute relief material among the affected people.
While granting permission to the NGO christened ‘Khola Hawa (Open Air)’, which was earlier denied permission by the district administration, the single-judge bench of Justice Amrita Sinha observed that there was no rule that organisations other than government bodies would not have permission to distribute relief materials at any place.
She also observed that the existing law and order problem could not be an excuse for denying permission, since the Central Armed Police Forces (CAPF) were already posted in Murshidabad.
The NGO approached the bench of Justice Sinha after the Murshidabad district magistrate denied permission for its members to visit the troubled spots in the district to distribute relief there. Parts of Murshidabad district in West Bengal have been on the boil last week after protests over the Waqf (Amendment) Act turned violent.
In the petition, the NGO alleged that while the district administration was allowing different political parties to reach the troubled spots with relief materials, the permission to the organisation was deliberately denied.
The matter came up for hearing on Thursday afternoon. The counsel for the NGO argued that there was no reason for the district magistrate to deny the permission since the state Director General of Police had already claimed that the situation at Murshidabad was currently more or less normal. “The NGO members want to go there to distribute relief items like tarpaulin, food, and medicines to those affected,” the counsel of Khola Hawa argued.
Although the state government opposed the arguments, Justice Sinha finally accepted the argument of the counsel of Khola Hawa and permitted the NGO to visit the troubled spots and distribute relief items there.
However, she maintained that only three members of a relief team should visit any troubled spot at a time for the time being. At the same time, these three team members would have to inform the district magistrate at least 24 hours in advance about their visit. The visiting team members, as per the court order, should also not make any provocative statements during the process of relief distribution that might trigger tension in the area again.
International
Extreme marine heatwaves tripled over past 80 years: Study

London, April 17: The number of days each year that the world’s oceans experience extreme surface heat has tripled over the past 80 years due to global warming, a new study has found.
Researchers found that, on average, the global sea surface saw about 15 days of extreme heat annually in the 1940s, Xinhua news agency reported.
Today that figure has soared to nearly 50 days per year, revealed the study published in the journal Proceedings of the National Academy of Sciences.
Global warming is responsible for almost half of the occurrence of marine heatwaves — periods when sea surface temperatures rise well above normal for an extended time.
The study, produced by a team of scientists from the Mediterranean Institute for Advanced Studies, the University of Reading, the International Space Science Institute, and the University of the Balearic Islands, also found that rising global temperatures are making extreme ocean heat events last longer and become more intense.
“Marine heatwaves can devastate underwater ecosystems. Extended periods of unusually warm water can kill coral reefs, destroy kelp forests, and harm seagrass meadows,” said Xiangbo Feng, a co-author of the study at the National Centre for Atmospheric Science at the University of Reading.
The impacts of marine heat waves extend beyond the ocean. The researcher warns that increased marine heatwaves could, in return, cause our atmosphere less stable leading to more frequent and powerful tropical storms in some regions.
“As global temperatures continue to rise, marine heatwaves will become even more common and severe, putting increasing pressure on already stressed ocean ecosystems. These increased marine heatwaves could, in return, cause our atmosphere less stable leading to more frequent and powerful tropical storms in some regions,” Feng said
Noting that human activities are fundamentally changing oceans, the study called for urgent climate action to protect marine environments.
Business
US tariff hikes no longer make economic sense: China

Beijing, April 17: A Chinese foreign ministry spokesperson said on Thursday that the United States’ 245 per cent tariff on certain products from China no longer makes economic sense.
It the US continues to play the “tariff numbers game”, it will pay no attention to it, according to the spokesperson, Xinhua news agency reported.
The statement came in the wake of White House’s statement that China faces tariffs of up to 245 per cent due to its retaliatory action.
China now faces up to 245 per cent tariffs on imports to the US as a result of its retaliatory tariffs, according to the White House Fact sheet.
This came after Beijing ordered its airlines not to take any further deliveries of Boeing jets in response to the earlier US decision to impose 145 per cent tariffs on Chinese goods.
According to the White House, the US President is open to making a trade deal with China, but Beijing should make the first move.
“More than 75 countries have already reached out to discuss new trade deals. As a result, the individualised higher tariffs are currently paused amid these discussions, except for China, which retaliated,” it said.
The White House also accused Beijing of banning exports to the US of gallium, germanium, antimony, and other key high-tech materials with potential military applications.
There are no winners in a trade conflict and the tussle between China and the US raises the risk of economic and geopolitical fallout, a report by S&P Global Ratings said this week.
Home to sizable manufacturing activities, Asia-Pacific is highly dependent on exports to the U.S. and China for growth. At the same time, Asia-Pacific depends on the US mostly for security.
The region could find itself pushed to take sides or walk a delicate line between the two large economies, the report stated.
To counteract tariffs, Asia-Pacific governments are exploring the formation of regional trade blocs or bilateral trade agreements. These efforts could accelerate, expediting the need to relocate supply sources and production.
China’s economic growth is seeing rising downside risk amid rising trade tensions with the US as its export engine falters from weaker global demand. The country’s domestic growth engine remains subdued, given the lingering real estate crisis, which is dragging down confidence.
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