Zomato, now rebranded as Eternal Limited, has diversified its operations beyond food delivery to include quick commerce, live events, and kitchen supplies. This strategic rebranding reflects the company’s expanded scope and aims to strengthen its market position.
In the third quarter of FY25, Eternal reported a 64% year-on-year increase in revenue, totaling ₹5,405 crore. However, net profit declined by 57%, amounting to ₹59 crore, primarily due to increased expenses related to the expansion of its quick commerce platform, Blinkit.
The company anticipates its food delivery segment to grow at an annual rate of 30% over the next five years, driven by rising demand in urban centers.
In August 2024, Eternal acquired Paytm’s movie and events ticketing businesses for $244 million, enhancing its presence in the online ticketing market.
These developments underscore Eternal’s commitment to diversifying its services and solidifying its position in India’s evolving digital economy. A comprehensive SWOT analysis—assessing Strengths, Weaknesses, Opportunities, and Threats—provides insight into the company’s current standing and future prospects.
Strengths
- Robust Financial Performance: In the quarter ending September 30, 2024, Zomato reported consolidated net sales of ₹4,799 crore, marking a 68.5% year-over-year growth.This substantial increase underscores the company’s effective operational strategies and its ability to adapt to market trends.
- Strategic Acquisitions: In August 2024, Zomato acquired Paytm’s movie and event ticketing businesses for $244.2 million.This move diversified Zomato’s service offerings, allowing it to tap into India’s burgeoning online ticketing market and reduce dependency on food delivery services.
- Dominant Market Share: As of November 2024, Zomato held a 58% market share in India’s food delivery sector, outperforming competitors like Swiggy. This leadership position enables Zomato to leverage economies of scale and maintain a competitive edge.
- Innovative Service Expansion: The company’s quick commerce platform, Blinkit, has experienced significant growth, with gross order value surging by 130% in the first quarter of 2024.This expansion reflects Zomato’s agility in responding to consumer demand for rapid delivery services.
Weaknesses
- Profit Margin Pressures: Despite revenue growth, Zomato’s net profit for the second quarter of 2024 was ₹1.76 billion, falling short of analysts’ expectations of ₹2.70 billion.The shortfall was attributed to increased costs from expanding Blinkit’s infrastructure, highlighting the impact of operational expenses on profitability.
- Regulatory Challenges: In December 2024, India’s tax department ordered Zomato to pay ₹8.04 billion in taxes and fines for alleged non-payment between 2019 and 2022.While Zomato plans to contest the order, such regulatory issues can strain financial resources and divert management attention.
- High Attrition Rates: The company faces challenges with high attrition among delivery drivers, necessitating enhanced benefits and flexibility to attract and retain gig workers.This situation can lead to increased recruitment and training costs, affecting operational efficiency.
Opportunities
- Market Growth Projections: India’s e-commerce sector is expected to grow from $123 billion in 2024 to $300 billion by 2030, with online shoppers projected to reach 500-600 million.Zomato can capitalize on this expansion by broadening its service offerings and enhancing its digital platforms to cater to a larger consumer base.
- Expansion of Service Portfolio: The acquisition of Paytm’s ticketing units and the development of the ‘District’ app for dining-out experiences position Zomato to offer a comprehensive suite of services, increasing customer engagement and creating new revenue streams.
- Technological Advancements: Investing in artificial intelligence and data analytics can enhance personalized customer experiences, optimize delivery logistics, and improve operational efficiency, giving Zomato a competitive advantage in the market.
Threats
- Intensifying Competition: Competitors like Swiggy are expanding their services and have filed for significant IPOs, indicating a robust competitive landscape.This intensifying competition may lead to price wars and increased marketing expenditures, potentially impacting profit margins.
- Regulatory Scrutiny: The Indian government’s increased focus on regulating the gig economy and digital platforms could result in new compliance requirements, affecting Zomato’s operational flexibility and cost structure.
- Economic Uncertainties: Global economic downturns or domestic economic challenges, such as inflation and policy changes, can affect consumer spending on discretionary services like food delivery, impacting Zomato’s revenue growth.
Conclusion
In 2025, Zomato continues to leverage its strengths, including a robust financial performance, strategic acquisitions, and a dominant market share, to maintain its leadership in India’s food delivery and quick commerce sectors. However, challenges such as profit margin pressures, regulatory hurdles, and intensifying competition necessitate strategic responses. By focusing on opportunities like market growth, service expansion, and technological advancements, Zomato can strengthen its position and continue to drive growth in the evolving digital economy.
Anantha Nageswaran is the chief editor and writer at TheBusinessBlaze.com. He specialises in business, finance, insurance, loan investment topics. With a strong background in business-finance and a passion for demystifying complex concepts, Anantha brings a unique perspective to his writing.
