Blinkit achieved a significant milestone by turning profitable in Q3, marking a potential turning point for Zomato's quick commerce segment. The profitability breakthrough came alongside strong performance metrics across both the quick commerce and food delivery businesses, though the company faces new competitive challenges ahead.

Blinkit's Profitability Breakthrough

Blinkit's transition to profitability was driven by a sharp improvement in contribution per order, with the platform earning ₹30.00 per order in Q3. This represented a 25% increase compared to Q2, achieved through factors including sales mix changes, operating leverage, and seasonality benefits.

Despite the positive contribution metrics, gross profit margins declined by 20 basis points sequentially to 26.60%. Additionally, GST cuts implemented in September adversely impacted Blinkit's NOV growth rate by approximately 3 percentage points, though the platform still achieved 14% sequential growth.

Store Expansion and Network Growth

Blinkit continued its aggressive expansion strategy, though at a slightly moderated pace compared to previous quarters. The company added 211 net stores in Q3, bringing the total dark store count to 2,027 locations. This followed the addition of 272 net stores in Q2.

Management attributed the moderating expansion pace to slow construction activity in Delhi NCR due to pollution-related restrictions and the company's strategic prioritization of order volumes over new store openings. The company remains confident about reaching 3,000 stores by March 2027, which would require approximately 200 new store additions every quarter.

Food Delivery Business Performance

Zomato's core food delivery segment demonstrated robust growth across key metrics. NOV increased 17% year-on-year to ₹9,846 crore, while customer engagement metrics showed even stronger momentum.

Average monthly transacting customers grew faster at 21% to 24.9 million, indicating that order value per customer declined during the period. The take rate increased significantly by 243 basis points to 31%, reflecting higher commissions from restaurants and platform fees. However, EBITDA margin growth was more modest at 40 basis points to 5.40% due to rising operating costs.

Competitive Challenges and Strategic Considerations

Despite the positive Q3 results, Blinkit faces emerging competitive pressures that could impact future profitability. The company recently implemented delivery fee waivers in select markets, responding to increased competition where rivals have eliminated minimum order values, delivery fees, or both.

Management commentary suggested potential acceleration of store expansion plans depending on competitive dynamics and market conditions. If the company decides to target 3,500-4,000 stores by FY27 instead of the current 3,000-store target, it would require approximately 300 new store additions quarterly, with initial setup costs potentially impacting EBITDA margins.

Leadership Transition and Market Valuation

Coinciding with these operational achievements, Zomato announced a leadership transition with founder CEO Deepinder Goyal handing over responsibilities to Albinder Dhindsa, Blinkit's current CEO. This change comes as both Zomato achieved its highest-ever EBITDA margin and Blinkit reached profitability.

Despite strong operational performance, Zomato's stock has declined 23% from its October peak of ₹368. The stock continues to trade at an EV/EBITDA multiple of 40 based on FY28 estimates, reflecting elevated valuation levels even after the recent correction.

Three major quick-commerce platforms have removed explicit "10-minute" delivery promises from their branding following sustained pressure from the Union Labour and Employment Ministry over gig worker safety concerns. Blinkit, Swiggy's Instamart, and Zepto have updated their app descriptions on both Google Play Store and Apple App Store to move away from time-bound delivery commitments.

Platform Rebranding Changes

The platforms have adopted new positioning strategies that emphasize product range and convenience over speed-based promises:

Blinkit's transformation represents the most significant shift, replacing its long-standing tagline with broader positioning that highlights its expanded product catalog while removing specific time commitments. The company has increased its advertised product range from 10,000 to 30,000 items while focusing on doorstep convenience rather than delivery speed.

Government Intervention and Worker Safety

The changes follow a series of meetings between Union Labour and Employment Minister Mansukh Mandaviya and quick-commerce platform representatives. The Labour Ministry expressed concerns that aggressive delivery timelines place excessive pressure on gig workers, forcing riders to rush and potentially compromising their safety on Indian roads.

Officials opted for voluntary compliance rather than imposing formal legal restrictions, asking platforms to reduce aggressive time-based promotions. The approach has resulted in industry-wide adoption of more flexible delivery messaging without regulatory mandates.

Industry Response and Worker Advocacy

Labour advocates and unions have welcomed the voluntary compliance, viewing it as progress toward improved working conditions for delivery partners. Worker representatives argue that prominent "10 minutes" displays on delivery bags and app interfaces create unrealistic customer expectations and heighten stress levels for gig workers.

The platforms' decision to voluntarily modify their branding demonstrates responsiveness to government concerns while maintaining their quick-delivery business models. The shift represents a balance between operational efficiency and worker welfare considerations in India's rapidly growing quick-commerce sector.