Indian delivery company Eternal, formerly known as Zomato, reported a 78% decline in its net profit for the fourth quarter.

The company posted a consolidated net profit of 390 million rupees (US$4.6 million) for the quarter ending March 2025, a decrease from 1.75 billion rupees (US$20.7 million) a year earlier.

The decline in profits is attributed to increased spending in its quick commerce unit, Blinkit, which expanded operations amid rising competition.

Eternal also highlighted potential challenges from Amazon and Walmart-backed Flipkart, which have recently shortened delivery times in the quick commerce market.

🔗 Source: Reuters

🧠 Food for thought

1️⃣ Quick commerce’s hypergrowth comes at a steep profitability cost

India’s quick commerce sector demonstrates how explosive growth and market share battles often require significant financial sacrifice before achieving sustainable operations.

Blinkit’s revenue more than doubled year-on-year while its store count grew from around 650 to 1,301 locations, but its adjusted core loss simultaneously expanded nearly fivefold to 1.78 billion rupees.

This pattern reflects the broader market dynamics where India’s online food delivery sector grew significantly, from $4.82 billion in 2017 to over $27 billion in 2022, reflecting a 460% increase in just five years 1.

The sector’s projected CAGR of 22.25% through 2033, potentially reaching $265.12 billion, explains why companies are prioritizing rapid expansion over immediate profitability 2.

Zomato’s quarterly profit fell 57% earlier this year specifically due to Blinkit-related spending, highlighting the ongoing financial sacrifice required to compete in this high-growth segment 3.

This expansion-focused approach has resulted in intense competition where discounts and subsidized delivery have become necessary competitive tools, creating a challenging path to profitability for all players.

2️⃣ Traditional food delivery faces cannibalization from its own quick commerce initiatives

The original food delivery platforms are experiencing an unexpected competitive threat: their own quick commerce divisions.

Zomato explicitly acknowledged that growth in its core food delivery business has slowed partly due to “competition from quick commerce itself,” which can deliver packaged meals with greater speed and efficiency.