Zomato's conundrum - Can it really be profitable ?
In an earlier article, I had written about the problem with delivery apps. https://rpdeans.blogspot.com/2023/08/the-problem-with-delivery-app-business.html My contention was that the market size was limited (less than what was projected by VCs) and growth would be limited. Margins from restaurants would reduce as competition offered them lower fees, or a subscription model. Delivery costs would rise, given that gig workers were inadequately compensated. This created a conundrum of falling growth, reducing margins and higher costs. Blinkit was a way to continue growth and kick the can down the road as far as profitability was concerned. So too, I believe is the company founder’s announcement that he wants to get into the airline space (running it like a bus service) and more recently, consider manufacturing jet engines. What I wrote in 2023, appears to hold good today, despite a lot of effort by Zomato (eternal) to be profitable. I was called a sceptic when Zomato (Eternal) posted ...