Ladies and gentlemen, good day and welcome to Zomato Limited Earnings Conference Call. From Zomato's management team, we have Mr. Deepinder Goyal, Founder and Chief Executive Officer, and Mr. Akshant Goyal, Chief Financial Officer, with us on the call today. Before we begin, a few quick announcements for the attendees. Anything said on this call which reflects our outlook for the future or which could be construed as a forward-looking statement may involve risks and uncertainties. Such statements or comments are not guarantees of future performance, and actual results may differ from those statements. All participant lines will be in the listen-only mode. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Akshant Goyal from Zomato. Thank you.
And over to you, Mr. Akshant.
Thank you, moderator. Hello, everyone. Deepinder and I welcome you to this call. We hope you all got a chance to go through our shareholder letter that we shared yesterday. We also hope you like the new format. We both are here to answer any incremental questions that you may have, which we may not have covered in the letter. With that, I request the moderator to please take the first question.
Thank you very much. Ladies and gentlemen, we will now begin the question- and- answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. We will unmute your line and take your questions in the respective sequence within the scheduled time. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Chirag Shah from CLSA. Please go ahead.
Yeah, thanks. Thanks for taking my question at the outset. Also thanks for the interactive format of the shareholder communication. That will be very useful. I was hoping to understand what proportion of incremental customer acquisition is organic. I would assume that majority of it would have moved in favor of organic. If that is true, what is the impact that we see on the overall CAC and A&P spending going forward, especially in the context that we now have presence across 1,000 cities covered?
Yeah. Hi, Chirag. Thank you for the question. I think one context here for our business, we did not start as a food delivery business. We already had a thriving dining out listings business in India, which meant that even when we started our food delivery business four or five years ago, a large portion of our new users for food delivery were actually organic, right? That percentage has actually increased over time, as a presence as a brand has become much wider in the country.
A large portion, I would say majority, more than 50% of our new users every quarter are still organic, which means our CAC, we believe, is lower as compared to platforms who are standalone food delivery players or who don't have the legacy as a brand or a business that we enjoy in this country. They continue to trend in a downward direction, you know, year- on- year, which overall makes the economics going forward healthier and in a way leading to the improvement that we have seen in the overall P&L of our business in the last three, four years.
Sure. My next question is to Deepinder. As we look for adding adjacencies to our core food delivery business, what are the thoughts on the super app structure that some of your peers seem to be pursuing versus the app within the app structure that we seem to be looking forward to? Just your thoughts on the overall customer experience, brand association between the two models.
Chirag, we haven't seen the super app burst in India so far yet. I think the jury is still out whether like super apps will work or like super brands will work. We are still figuring it out, I would say.
Understand. Actually I have more questions. Can I go ahead with my questions, moderator? Or should I go back in the queue?
I recommend you to re-join the question queue.
Sure, I will do that. Thank you. Thank you, Deepinder and Akshant. Thank you.
Okay. The next question is from the line of Vivek Maheshwari from Jefferies. Please go ahead.
Hi, good evening. My first question is on, you know, your, you know, your, the letter talks about, you know, uncertain terms about, you know, to focus on reduction in losses as well as accelerated growth. Is it that easy to balance the two at this point of time, given that, you know, for incremental customer you still need to have subsidies out there? If you don't do that, then, you know, I mean, basically balancing the two, how easy or difficult it is, because, you know, I think the letter clearly talks about, you know, focus on profitability as well as, or reduction in losses as well as accelerated growth.
We were actually you know this business losses reduce because of growth right? Because as your portion of your business I mean there's a segment of your customer base which is profitable. As that portion grows your contribution overall contribution dollars start to swell right? I think as we grow faster actually it becomes easier for us to reduce our losses because operating leverage is kicking in. There are scale benefits and economies of scale in the business as well. We don't see that necessarily being a choice that we have to make all the time especially at the current scale of our business.
The last few quarters, last couple of quarters, we've seen business grow sequentially, quarter-on- quarter while the losses have come down. We expect the same trend to continue from at least where we are today and what we see on the ground today.
Okay. A follow-up to that, Akshant, you know, how different this is from an FY 2018, 2019, 2020 when you were growing very rapidly and the losses were also swelling. Do you think the scale is now right, for you to derive operating leverage? Because I would have imagined if you still want to get the end customer onto your platform, you will still need subsidies, right? Which will mean that you still need to incur a fairly, you know, high, amount of cash burn. Particularly, you'll go down the curve, right? I mean, let's say so to speak, the premium customer is already there on the platform, so incremental customer will be value too, but you will need more subsidies to get him or her on the platform.
Vivek, FY 2018- 2019, we were starting off our business, right? I would say at that time, the share of orders that we get from new users on our platform every month was way higher than what it is today. Today, you know, more than 90% of our business in a month is actually from repeat users. Back in FY 2018- 2019, because it was largely every month about acquiring more users, which was due to the category, we had to spend money on acquiring them and then also making sure that we incentivize them to make a repeat order on our platform and create that habit and ecosystem that we wanted.
I think where we are today, the overall scale of customers based on our platform is now meaningful enough that even at a healthy new user addition pace, you know, majority of our business is repeat, where we don't spend money on subsidies, right? Where people are coming to our platform for the convenience and assortment that they get, choice they get, and that business actually is not required to be subsidized.
To add more color to this here, I think most of the growth over the next couple of years will come from repeat frequency going up rather than us getting a lot of new customers onto the platform.
While in absolute terms, it's interesting because we're still acquiring more new users every month than we've ever done in our life, right? When we started in FY 2018, we started from zero, right? We were acquiring, let's say 500,000 new users a month. Today, we are onboarding 3x-4x of that, right? Our new user addition in absolute terms has actually grown over the last two, three, four years. Their share of our monthly business has gone down because of a very high repeat customer base. I hope you're able to make sense here.
Right. Just to conclude, basically, you are saying that, you know, from a GOV standpoint, the frequency will go up, you know, from a on a percentage basis, much more than, you know, the new users that you will be getting onto the platform.
Yes, that's right. When we say frequency, we look at it more from an annual frequency, more than monthly frequency, right? Our penetration of monthly transacting users compared to annual transacting users is right now very low. As you would have seen in our data that we have about 50 million annual transacting customers, of that only 15 million order every month. As more people order every month, we expect our annual frequency to go up multiple times from where we are today, for which, we don't need to spend money on subsidies or discounts.
Got it. My second and last question, can you just talk about Blinkit to the extent you can? I mean, the press release does talk about hyperlocal, you know, and your intent to participate in that. Given how the market is crowded, the full stack grocery baskets, you know, are not able to, you know, break even at the current levels and all the dynamics need be in terms of MRP and all. Why such an obsession with grocery and what is your, you know, expectation from this business, if you take a two, three, five -year view?
Vivek, first of all, I think it's not just grocery. I think we look at it as a broader commerce play. Grocery could be one of the categories that customers purchase on our platform, if you talk about the Quick Commerce business. I'm here not talking about Blinkit. I'm just talking of our philosophy on quick commerce and why we think it's effective, right? I think in the past, whenever in India at least, the online grocery space has run in a particular format which you are questioning right now whether it will work ever or not, even you're saying that these businesses have not broken even. We are approaching it differently, where the distribution model here is actually not centralized warehouses, but they're actually local micro warehouses or stores.
We are using our existing capabilities on the hyperlocal delivery side to be able to deliver some of these products to customers within two minutes, right? I think while the product being sold to customers is still grocery, but the manner in which we are doing is different, and the capabilities that we already have are also different. It's not very like to like in my mind. More importantly, I think right now the online penetration on grocery is so small in the country, we don't think of it as us taking share away from existing incumbents, right? I think there's so much to grow in terms of penetration. The market is very, very large and it's too early to worry about competition here. I think our guiding principles here are that we want to be efficient. Sure.
In the past, we have demonstrated that, you know, we'll be more capital efficient while building our food delivery business as compared to anyone else in India. We'll keep that same principle in mind and keep building this business because we do believe that our existing business gives us the right to win and build a much larger business, which will also create a much more defensible business in the long term for us.
Just a follow-up, Akshant, on this, because this is one point which, you know, a lot of investors are talking about in today's conversations as well, which is basically if you look at the supply side, the neighborhood stores, you know, the mom-and-pop kiranas that India has, number one. Number two, the use case for a 10- to 30-minute delivery and the number of players who are here, do you think that, you know, the market is right to acquire, you know, or Blinkit or whatever, whichever form you will ultimately do this? Particularly on the inorganic side, given that the market is far more competitive, and I don't know if the use cases are as much to justify the number of players that we have in this case. What happens next? Is it consolidation or?
Because it looks very difficult, you know, at least to me as an analyst, you know, how will you make money in the medium term, given you know, the kind of competition plus the neighborhood store, which is a very efficient system in India. Thank you.
Sure, Vivek. Appreciate that. I think and look, we went through the same cycle and journey on our food delivery business, when we had same questions that we were posing to ourselves back then. Now, of course, there are other shareholders who think about the company also. I think, eventually we do think there is a market and this is a model which actually is more efficient than the kirana model, and that's why it will work, right? Because, reliably delivering, groceries or few other products, in minutes is not something which kirana offers, even in India, right?
While, you know, they are efficient, they have lean cost structures, but the consistency of service that we are aiming to provide here to customers through the Quick Commerce that we are thinking about is in our mind going to be that experience. I think that's the only scenario under which it'll grow and it'll really play out. You know, M&A buy-build versus buy is, of course, a separate debate, and I'm not getting into that right now. But idea is that as long as we're paying a fair value for what we are buying, then that should be okay with everyone.
Sure. Wish you all the best.
Thank you, Vivek.
Thank you. The next question is from the line of Sachin Salgaonkar from Bank of America. Please go ahead.
Hi, thank you for the opportunity. My first question is an extension on the Quick Commerce. Akshant, would like to hear from you how do you guys look at the unit economics of this business? You know, especially given the point that you mentioned about consistency of service is important. What kind of investments one should largely look for from a warehousing and logistics perspective?
Yeah. I think here, in addition to, if you compare this to food delivery business, then there's an additional element of having a backend supply system which supplies to these dark stores. Then we of course fulfill them through the last mile delivery fleet that we have, right? We have to look at the business here overall, therefore, the package in terms of some CapEx that we may need to do and some operating losses that we need to fund. Ensure that over time we see a line of sight to this getting profitable on a unit economics perspective. Right? I think too early for us to give you color on, you know, specific unit economics levers here and how they are trending.
We don't have that data or not authorized to share that data with you right now because the only access we have is to Blinkit data as a shareholder, right? At some point in time, I think, you know, once we get into this business, then should be happy to provide you more color on this.
Okay, thanks. You know, I remember in your previous quarter results you had mentioned a chart saying that, you know, there is one core business to start off with, and in second years there will be a second core, and eventually in the longer term, there would be other cores. Just staying on that point, does this essentially means that, you know, any potential acquisition in Quick Commerce business is at least a year away or, you know, this turning a core is one year away, as you had mentioned earlier?
No definite timeline in our head, Sachin. I think we'll take it as it comes. We don't necessarily need to acquire every business that we invest in also. I think some of the investments are done with the objective of working closely with these companies and strategically aligning with them over going forward. As of now, I think we'll take it as it comes if and when we need to, if there's a reasonable case for doing an M&A versus not.
Got it. You know, second question is, you know, you guys had mentioned that currently there are no plans on making any more minority investments, but the existing companies might need more capital. Is it fair to assume that on a proportionate basis as and when these companies look for capital, you guys will inject in that?
I think most of these companies are doing really well. We don't think there is an immediate need for raising money in these companies. I mean, as far as we know. You know, we'll take a call if we come to that point when these companies are raising funds on whether we want to maintain our pro rata stake or not or even letting the round go, right? You know, up to that, we haven't decided on that yet because we haven't come across or at least we don't believe that these companies are at this point looking to raise capital.
Okay. Third question is, just wanted to understand the impact of higher inflation on your business, both on wage inflation from gig economy workers, as well as any impact on demand?
Sachin, it's very hard to actually be able to isolate the impact of these things. Right? I think what we are seeing in our business is that the business continues to grow and costs are still coming down. I do believe that there are definitely some headwinds here on inflation, which could be impacting consumer demand. Notwithstanding that, we still seeing the business grow, which is great. On the cost side as well, yes, I mean there is a pressure because of the fuel price increases. We talked about that in our letter also. We've recently seen government of India give some relief on that.
Hopefully, that should further help us on our profitability journey.
Thanks. Last question, what all goes into unallocated costs?
As we mentioned also in the table, these are actually server and tech infra costs. These are corporate salaries and corporate overheads. These are costs which are not allocatable to any business that we run.
All right. Thank you.
Thank you. The next question is from the line of Ankur Rudra from JP Morgan. Please go ahead.
Hey, thank you for doing the call and also for the additional disclosures this quarter. We would obviously love to have some more on a regular basis, little bit of more higher frequency. The questions I had were on, contribution margins to start off with. If you think about the relationship on a structural basis between the delivery costs for Zomato as a platform, earnings for delivery partners and external costs outside of their control like food and social security costs as the platform matures, what's the level of control you have over this and how do you see this evolve?
Ankur, especially so if we are in a steady state, you know, I think the response to this question would be different. Where we are today in our journey, if you let's say look at a specific neighborhood, right? We see things evolving in a particular neighborhood, if we take that example, is that over time the order density is going to go up, right? That will essentially means that the that neighborhood will mature in terms of getting more restaurants and getting more customers who are ordering from those restaurants, which will lead to more orders within that small neighborhood. That will drive that will essentially lower the delivery radius we can, right?
Because right now we have in some localities and most localities, the delivery radius are way more than what we would ideally like to have or what we see in future. As that happens, where the order density in a neighborhood is going up and delivery radius is going down, the delivery costs will come down massively. Because the delivery costs largely today are per order pay out to delivery partners is a function of distance they travel. As that happens, the savings that we make from where we are today are going to be meaningful and some of that we would share with the delivery partners so that their earnings also go up from what they are today. Right.
I think we are on a journey or a stage where we are on that journey today, Ankur. From here on I think there is a long way before we get to a place where some of the impact we'll have to actually pass to customers to sustain, to stay in the same place from a cost perspective.
Okay. As a follow-up to the contribution margin question and on a broader basis, I think in your investor letter you highlighted that, the levers for higher contribution margins to double digits, the journey to double digits include restaurant commission rates, ad sales and delivery charges. Can you talk about how you see this go up across the platform? You already have, I mean, Zomato I see has one of the highest merchant take rates globally, and also you're probably the most successful over ad sales and customer delivery charges. How do you see this evolve over the next three to five years to achieve your double-digit aspirations?
I think first of all, we don't agree with the comment that you made that we have the highest commission rates globally on food. I think our understanding is that, you know, take rates for example in U.S. are close to 25%-30%. I think you may be getting confused because of how some of the metrics are reported in different countries. For example, revenue is reported differently, net of discounts in U.S., which could give an impression that the take rates are lower. If you would talk to restaurants there, take rates are north of 25%. Right. I think therefore we think, that's not a factor and that's not a comparison we think is valid.
In general, I think when we talk about revenue, whether it is, commission rates, what we get from restaurants or customer delivery charges, it's a function of, what value we are bringing to the stakeholders, right? As long as we continue increasing that value to the customer or to the restaurant, we expect the willingness of the other side to pay us more over time. That's what we have seen in the last three, four years, where our revenue per order has grown consistently. Even if you compare the last four, five quarters, it's been trending well. Going forward as well, that's the expectation that it's up to us on how we drive convenience for our customers, how we drive growth for our restaurant partners.
If we are able to do that job well, then I, we don't see any challenges in them willing to pay us more for the service.
Thank you. Just two questions on the Quick Commerce side. There's been some discussion so far. The broader point for me, it seems like you're defining yourself as a hyperlocal business with an intent to diversify beyond food. I'm just curious, you know, is this a relatively new realization or was it always the plan? And also how does it impact your EBITDA, you know, positive expectations over the next two or three years?
Sorry, Ankur, I didn't get your first part of the question. Can you repeat that?
Yeah. The first part of the question was on the hyperlocal side. You know, which is you've sort of defined recently yourself as a hyperlocal business in the recent investor letter, beyond just food delivery. I was curious about is this something you always wanted to do in the last two or three years or is it more recently? Because earlier it was food and grocery, but you're still around the food like ecosystem, it seems, you know, beyond that from your comments as well.
I think you know I think our last three, four years were largely about building the food delivery ecosystem in India, right? Building this business first. We've gone through a journey where there was hyper competition, where there were questions on economics of the business, whether it will be sustainable or not. For sure, I think we did not start food delivery with the sort of mindset of building a food commerce business three years down the line. I think the process, our process has evolved as we have seen food delivery settle down into a large industry and market with compelling economics.
Now as we think of a future forward in terms of what we can build on top of what we have and where do we have the right to win, we think quick commerce is a great adjacency for us, in that respect.
Over the last few years, we have always been thinking about that these are the moats that we have and what can we do with the moats that we have. Hyperpure business is also one of those businesses which is very. This is the strength that we already have. I think the concept has been around for the last few years with the specificity of sort of like quick commerce that may be a couple of years old.
Appreciate that, Deepinder. Just a question on the EBITDA target or let's say, you know, turning EBITDA positive as a group. Maybe I can merge the two questions. Do you think the potential for the interest of how much you have highlighted $400 million investment, which could include losses, would that push out the breakeven for the company, compared to what you said before? Also a related one is, you know, this $400 million is spread FY 2022, 2023. We are already halfway through FY 2022. So will it be effectively 400 divided by 18, 19, so approximately a $20 million burn for the next, you know, on a monthly basis for the next 18 months actually?
Ankur , the way we think about it is that, look, we have a cash balance in the bank today, right? We want to get the company to profitability without raising or diluting any more. I think that's how we are thinking about it. Like, with the current $1.6 billion that we have in the bank, we should get to a profitable business on an aggregate basis as you define it on a group basis, right? Now, with that, we don't necessarily feel the need to get to group or profitability sooner by not doing quick commerce. I don't think that's the right way to think about doing or not doing that business.
I think as long as our food delivery business is increasingly becoming profitable and we are seeing and allocating a reasonable budget for our foray into quick commerce as and when we do it, and we remain within these sort of binding, I mean, this framework of being capital efficient, then I think a few quarters here and there in terms of getting to EBITDA breakeven at a group level is fine. That's how we think about it.
Okay. Appreciate that, Akshant. Thank you.
You're welcome, Ankur.
Thank you. The next question is from the line of Garima Mishra from Kotak Securities. Please go ahead.
Yeah. Hi. Thanks for the opportunity. Can you please highlight differences in customer behavior that you've witnessed between your operations in, let's say, metro and Tier 1 cities versus other cities? Is the LTV- CAC equation significantly superior for tier one customers?
Hi, Garima. You know, in terms of customer behavior, of course, I think in more larger cities or metro cities, specifically within that also in more affluent or densely populated neighborhoods, the order frequency is higher, right, of customers. The order values are also higher. That gradation is there, and it's not necessarily a function of different cities, but within cities also that gradation exists. Eventually, as you rightly said, it's a function of CAC to LTV, and you know, that's how we measure. There, of course, are some cities where you have to take a long-term CAC, LTV- CAC to view, right? Because currently those cities are, or neighborhoods are not profitable. There is no LTV in a way.
I think what we watch is that how are those cities or neighborhoods trending in terms of some of these underlying customer demographics, how are the number of restaurants you know growing in those neighborhoods because of our presence or post our presence. As long as these trends are in the right direction, we think it makes sense to continue to be present in these cities and at contribution margins which are not paced out. Over time, we see the contribution margin improving and that. Which is what we have seen even in our larger cities. I think that's how we sort of think about it.
Okay. Understood. For FY 2022, is there any quantification that you may help us understand with as to what is the growth of these top few cities, or let's say top 10 to top 20 cities, whichever way you segregate it internally, versus some of the other cities in the mix?
By my top eight cities is 60% of our business, right? Our overall business cannot grow without these cities growing. You know, we haven't shared or don't want to share specific data on the growth rate of these cities, but suffice it to say that they're growing at a pretty healthy rate, which is not very different from our average growth rate right now.
Understood. I think you alluded to some of your other businesses early on in the call. Can you highlight the progress that you're making on your restaurant subscriptions, Zomato Pro, Hyperpure businesses, and how long before these businesses can become profitable at a segmental level?
Yeah, you know, our dining out business is profitable even now, although it's very small in scale and size today. The hope there is to get the share back that we had pre-COVID, which we lost in COVID because of dining out becoming irrelevant in India for almost two years. I think that business is already there and profitable, and I think as we've mentioned in our letter, we're working on a product update there and we hope to scale profitably going forward in that business. Hyperpure, again, covered that in the letter. Growing nicely, behind the investment phase in terms of expanding into new cities, and we're now every quarter seeing the margins improving in that business.
I mean, the focus on profitability there is no different than food delivery, and we expect to make progress every quarter going forward.
Right. Thank you so much, and wish you success.
Thank you.
Thank you. The next question is from the line of Mukul Garg from Motilal Oswal Financial Services. Please go ahead.
Thanks. Good evening, guys. Just two questions from my side. Deepinder, I just wanted to understand, on profitability side, you know, how should we see the correlation between order frequency, commission rate, and order density? Can you guys just talk about it? Because when you see, you know, when do you see the benefit of operating leverage actually start playing in them? If I look at, you know, your growth this year, growth was very good. You also added about 40% more restaurants over last two years, which would help with the density. But the frequency, as well as order density continued to remain very flattish over last three years. How should we see them grow in next three to five years?
I think, yeah, it's a good question, Mukul. I think you're referring to the annual order frequency, right?
That's correct.
Yeah, that's the point that I was making earlier, that our current annual order frequency is about 10x a year, right? Which is not even once a week, right? I mean, getting to once a week is about 3x a year. If you refer to our Q3 shareholder letter, we had shared a data point in terms of number of people who are ordering at least once a week on our platform. That number is a small 1.8 million. This was as of December last year. That's where I think to our earlier point, the growth opportunity is in terms of increasing frequency. Because you know of the 50 million people, today 1.8 million people are ordering once a week, right?
That number going up to 10, 15, 20 million people will mean meaningful growth in our business, you know, without even really acquiring any new user theoretically. That's the opportunity that we're excited about.
Sorry, just to follow from this, you know, is there any benchmark or any, you know, thoughts of which you guys have? How should we see the growth both in order frequency as well as the density part? Because, you know, what I see right now is that the delivery boy per ride is not even taking them on an average of one order. How should we see these metrics grow over the medium term?
Mukul, that's what I said. I think we expect the frequency, average annual frequency to grow up from 10x we have to ideally 40x, 50x at least, for a much larger number of users than we currently have. On your second point, I think if I'm not wrong, you are referring to the utilization or efficiency of the delivery fleet, where you're referring to number of orders they're delivering per hour. That number actually is not a one right now. So I just wanted to correct you. That is close to 1.5 or north of that. That's a driver of a delivery cost per order. I think as that metric goes up, which goes up with density of orders, we will see the density cost come down.
Sure. The second question was on the competitive intensity in this food delivery space. How should we see that, you know, from a medium to long term perspective? Will it be a scenario that you and Swiggy will have, you know, pretty much equal market share with little to differentiate different companies? You know, do you see clear differentiation which Zomato is driving, you know, which can move the needle in terms of market share?
I think, Mukul, you should tell us that. Like, we don't know how this will pan out. I think we essentially look at what we are doing. Interesting. You're obsessed with customer service. You're obsessed with our NPS ability to partner with the restaurant. I think the market share is an outcome of that. It's a large and competitive market, offline, and because so it's essentially something that you don't worry about too much. It's an outcome for us rather than something that we want to drive.
All that's clear. One more technical question, I'll get into the CX.
Thank you. Next question is from the line of Abhishek Bhandari from Nomura. Please go ahead.
Thank you. Hi, Deepinder and Akshant. Thank you for the detailed letter. You know, I had two questions. One, Akshant, if you can, you know, just correct me here. If I add your adjusted EBITDA and the contribution margin, I come to a total, you know, cost of around INR 1,300 crore for FY 2024. Now, understanding since the addition of EBITDA is variable in nature with opex and cash, could you help? Out of this INR 250 of company level overhead, how much is variable and how much is fixed? A related question is, you know, while you, Deepinder, spoke about a medium-term target profitability.
Do you have a breakeven timeline, you know, on your core food part, excluding your commerce foray, where you think, you know, your adjusted EBITDA at group level could start turning zero?
Can you just repeat your first question? Are you referring to the unallocated cost in the adjusted EBITDA, and your question with regards to how much of that is variable or fixed related to that?
Yeah . You can explain that. That's fine. You can explain that, yeah.
Yeah. I think most of it, I mean, the server and infra cost, I would say is semi-variable, right? Because as we scale, we have to spend more on that. Outside of that, I would say they're largely fixed, and then these costs go with inflation pretty much right now. We're not looking to add meaningful number of employees going forward. I think we're well-staffed. These costs therefore should be looked upon as fixed cost largely, and hence the operating leverage that we spoke about is what is going to play out even further as we go forward.
Could you share some timeline around, you know, your internal vision of, you know, reaching a EBITDA neutral business on the core food and, you know, hyper local part, excluding the hyper local part?
We don't have any timelines for this. We are actually operating on an, like, as soon as possible mode.
Okay, Deepinder, let me ask you another way. You know, if I heard you correctly, you said that you have enough money of $1 billion, you know, which is enough for you to eventually turn the business profitable. Should we think that is the kind of burn you're looking before we could start seeing that EBITDA flip?
No, no. Not at all. We want to hold as much cash as possible and we're not going to spend all of it. No way.
Okay. Sure. Got it.
Even most of it.
Okay. That's good to hear. Akshant, the second question is, you know, at multiple times, in the letter you have written that the core focus is, you know, top cities, and I think, you also mentioned, you know, more frequency increases is going to be the demand driver or growth driver. I'm just curious, you know, why expand so dramatically into new markets? Doesn't it take away your bandwidth? Rather you focus more on, you know, driving up some of the, you know, frequency in the mature markets because it seems that tier one markets are maturing rapidly for you.
Actually this is a very scalable product or category, right? I mean, once we have this in X number of cities, launching this in another 1x or 2x or 3x actually doesn't take away bandwidth. It's the same system, that we are taking to newer markets. And in fact, more data points makes the system overall, our business more robust, to my mind. We're not, you know, compromising on, attention here or level of, commitment to larger cities when we expand to smaller cities. And both in terms of our time as well as, you know, our balance sheet.
What we have also seen in the last two to three years, when we expanded from the first 10, 15 cities that we were in to the next 500, some of these cities now within the top 100 are getting to unit economics positive in a meaningful way and much larger in price than what they were when we launched them two years ago. The thesis is that, you know, the similar journey is going to play out in cities number 500 to 1,000. You know, as I said, there's no incremental cost of expanding and launching and being there first. I think this is the first mover advantage. That's how we think about this.
Sure. My last question, you know, Deepinder, is if I look at most of the global, you know, food delivery companies, even if, you know, those are working in developed markets like U.S., people have the habit of paying convenience fees and as you said, you know, take rates are considerably higher. You know, yet those companies are probably not, you know, turning profitable, or they don't have, you know, a clear term visibility of turning profitable. What gives us the confidence that, you know, our path to profitability will be smoother than trying to burn the entire money what we have?
I think what gives us the confidence is that we actually don't look at them here. We just look at our own business and we know that we will get there.
By the way, I think, Abhishek, DoorDash is profitable now, and so.
I don't know DoorDash.
Uber Eats or Uber, right? These businesses are now turning profitable.
We know our business really well. We will get there.
Okay. I see. Guys and all the best and hope, you know, we keep interaction going as the public level is coming forward. Thank you.
Sure. Thank you.
Question is from the line of Vijit Jain from Citi. Please go ahead.
Yeah. Thanks. Good evening. Thanks for doing this call. My first question is, you know, you had a GOV retention trend chart in the RHP for FY 2017, 2018, 2019. Do you have an update for what those cohorts look like in terms of GOV retention in FY 2022? That's my first question.
Vijit, that trend continues. We haven't shared that data because we felt that there is no incremental value to sharing that data, beyond what all of you already have from the disclosures we had in the RHPs. That trend continues, and we are seeing over time, new set of customers, orders more on our platform every year. That number keeps growing, which means that as a business we compound with just the same set of customers, right? Which is a point we are repeating a number of times on this call. I think that's the character of this business where the compounding is really strong once, customers get used to the platform.
Yeah, sure. My next question is, you know, when we look at some of the marketing expenses, obviously part of it is above contribution and part of it is below. Are all discounts above contribution margin?
Yeah.
Do you account for the absolute new users somewhat differently?
No. All our discounts are above contribution. In our parlance, we call marketing spend as money that we spend on digital marketing, ATL, right, or any other channel that we spend money on acquiring customers. That amount is below contribution, and all the discounts and subsidies are accounted for in the contribution.
Sure. Thanks. Just one final question from my side. With this expansion into about 600, 700- odd cities this year, can you give a sense of what is the cost structure like for running some of these cities? As in, some of these cities may be small scale, you may have very few orders in them, but is there a tangible cost that you're incurring in just being live in those cities?
Vijit, we keep iterating on this. I mean, we don't report it, but the number of cities which we pull out of when we see that nothing is panning out in those cities and there's no sense in continuing to be present. The number that we report in terms of the cities that we added is net addition, right, in a way, because there are some cities that we pulled out of. We look at individual city P&L regularly, and as long as we feel the investment in that city is within a certain bound and it's making sense in terms of how the ecosystem in that city is growing, then we sort of continue with that city, otherwise we pull out.
Sure. Thanks. One last question on the dining out business. This quarter, dining out business would have been in general back, right? Is it that, you know, this is post-COVID recovery and people are going back into restaurants anyway, restaurants are full and so restaurants are maybe not spending as much as they would have before on advertising on your platform. Is that what is happening in your view, or is there more to what you need to do in terms of product update there?
I think it's both, Vijit. Over the last two years, I think perhaps October, December last year was the quarter when we for the first time saw the dining out market in India really coming back in full scale. You know, but again, as you said, the restaurants weren't then full. We still made a meaningful progress in terms of some of the revenues in that business that was coming back. Now, we saw a pullback again in Q4 because of Omicron in January, which meant that restaurants again were shut in that quarter for a significant period of time. And we'll see how it goes, you know, going forward.
To our mind, I think over the last two years, because Zomato has been now associated as a primarily food delivery brand in consumers' minds, we also believe that we need a product and proposition upgrade to bring that association back in consumers' minds. That's the work that we are doing on our side, you know, while we still wait for full recovery on dining out from a restaurants remaining open standpoint.
All right. Great. Thank you, sir. Thank you so much. Those were my questions.
Vijit.
Thank you. The next question is from the line of Hiren Dasani from Goldman Sachs Asset Management. Please go ahead.
Thank you. Hi, Deepinder and Akshant, sir. Thanks for doing this call. So generally, at a high level, the three criticism which I think we have heard the most about Zomato as an investment is, A, absolute lack of profitability, B, you guys don't interact enough, and C, you guys have tricky capital allocation policy. Hopefully on all the three with the disclosures you have made and today's call, there should be some meaningful incremental progress. I just wanted to I mean ask you a question on the last part of the capital allocation and referring to question 28 and 29 in your release. $150 million of short-term loan, is that supposedly already given out or that yet to be given out?
Part of it is given out, Hiren, part of it is pending. We'll see if they need it. I mean, we've essentially committed to it, but whether we really need the money or not is a function of whether we need it or not.
Okay. As per your question 29, effectively, are you saying that the business plan of Blinkit means that the eventual $400 million to be raised in funding should be sufficient to take them to the path to profitability or beyond that, actually, it will be required at the Blinkit level?
It is very hard to look beyond two years in this business right now. I think in fact, I would say very hard to even look even for the next two years and put a number out. We thought we should do that, given the questions we are getting, as you rightly said, on quick commerce, and even on this call, there have been a lot more questions raised on viability of that business. I think, you know, this is where we are today, where we feel comfortable that, you know, this should be an upper bound, given what we know as variables today, and the knowledge and information that we have. I think we keep updating the group and everyone, you know, as we get new information or data points, as we go along.
Okay. You know, also the fact that at all you decide to kind of acquire a controlling stake there, right? You also have to think about the valuations of the entire tech consumer internet space, how they have kind of come out since the last round of funding of Blinkit. So, I mean, how are you sitting on those lines and if you need to do that or are you assuming a different point of time that you cannot even go down that route?
Hiren, I don't want to comment specifically on Blinkit because there is nothing definitive that we can share on that front. So far, it's just a financial investment for us. You know, but I mean, answering this question theoretically for any M&A that we do, right, I think yes, we are value conscious. We don't want to overpay, right? We haven't done that in the past for any deal that we've done. We'll follow the same principles and we have a strong and independent board, and we have a strong governance process, for any M&A, not just on valuation, but also on other things, on the rights we are getting in the business and so on. We'll follow the same process here.
We have that muscle well built in and, you know, we are not gonna make any mistake on that front.
Appreciate that. Thank you. I wish you all the very best.
Thank you, Hiren.
Thank you. Ladies and gentlemen, we are extending the call by 15 minutes. We take the next question from the line of Sudheer Guntupalli from Kotak Mahindra AMC. Please go ahead.
Yeah. Thanks guys for giving me the opportunity. Just extending the debate one of the previous analysts started on the obsession with quick commerce. Actually, delivery as a concept has been at least as old as food delivery, if not older. These companies like Blinkit have been around since 2013, 2015, and they were not really able to scale up. They've flopped on the strategy multiple times, shut down the business in multiple formats. In fact, Albinder Dhindsa once made a comment that same-day delivery has no use case in India. Now, there is a U-turn in the stance with this concept of 10-minute delivery.
If you take a step back and look at it, is it like a solution looking for a problem and it's a mere fad which can die down after some time? I'm talking about the overall industry as a concept as a whole, not specific reference to Blinkit.
Yeah. Sorry, Sudheer. Yeah. See, you know, we've also had our U-turns on grocery, online grocery as a business, right?
Right.
Twice. In fact, you know, before our IPO, I mean, you know, interestingly, it was the other way around. Everyone used to pester us for getting into that business, but we could not see any light at the end of the tunnel. Not on economics, but largely on the product market fit from a consumer standpoint, as you pointed out, right? We've tried therefore twice on our platform, we shut it down. I think what changed this time is, as I mentioned, you know, when we looked at this business in context of quicker deliveries than what was earlier the case, even quicker than food in some times, the PMF changed.
You know, the customer value proposition became much stronger than kiranas for the first time I checked in the last seven, eight years in this industry. Hence, you know, if you, for example, take a city where the GMV in online grocery was stagnant for the last five, seven years, they are doing multiple times of the GMV that we have seen in those cities on neighborhood today. Therefore, I think, you know, our first hurdle to overcome when we think of this industry is it a large enough market? I think we think there is in this format. Then we come to the second question of whether this is a sustainable business from an economic standpoint.
Increasingly over the last 12 months, as we've seen, some of these businesses progress, and also the fact that we have a large food delivery business which is synergistic, makes us confident that, you know, economics will work here and there is a large enough market out there, which could be accretive to profits in our business in the long run.
To add to that, I think, customer cohorts for the, like, quick commerce businesses are very, very good. So that is the product market right there. Some of these customer cohorts are better than the food business that we have. So it's not a n answer looking for a problem. I think there is product market fit there in that sense.
Sir, just on the $150 million loan, right? In case, hypothetically, if we assume that Zomato will acquire Blinkit at a future point in time, will this loan be converted into equity or this will still remain like an inter-related party loan? Any thoughts on that front?
That should be irrelevant, I think. I mean, hypothetically, if you acquire a business, it's a subsidiary, so whether we convert it into equity or not should not matter unless I'm missing something here.
It does. It is relevant. It matters, especially when there is dilution to the minority shareholders. Okay, my final question was-
I think that the debt is in the subsidiary, right? The dilution will not be at Zomato level.
Sure. One last small clarification. Your DRHP calls out an average monthly frequency of over 3x for users on your platform. Sometime back, I heard you mentioning annual ordering frequency of 10x a year. Where exactly is the disconnect?
That is true. That's the whole point, right? Every customer is not ordering every month. There are people who do order, maybe once in two months, so they're active on our platform. Maybe different set of customers are ordering 3x a month. That is why we have a 15 million customer base who's ordering every month and a 53 million customer base which is ordering every year.
Sure. You mean to say that the 15 million cohorts have the average monthly ordering frequency of 3x , and when you look at it comes to some of 60+ millions.
No, that's not what I'm saying. I'm saying that 15 million would be different customers in different months. It's not a cohort within the 50 million cohort who's ordering 3x . Right? If you are ordering in a month and not ordering in the next month, you get counted in the 15 million for the first month, but not for the second month.
Thank you, Mr. Guntupalli. May we request that you return to the question queue for follow-up questions. Thank you. Our next question is from the line of Aditya Suresh from Macquarie. Please go ahead.
Hey, thank you for the opportunity. I had two questions there. First is in the contribution margin section, you mentioned long-t erm. Can you help qualify that for us? Is it 10 years, 20 years? Any comments on that?
I think in our head, definitely not, 10 years. I think it should be lower than that.
Thank you. Maybe the second piece is on the high-frequency transactors which you used to disclose, right? I thought that was a static metric which helped kind of understand the business. Last quarter was at 1.8 million. Any update on that?
That wasn't quarterly, Aditya. We actually disclosed our numbers on a yearly basis for CY 2021. The idea of that disclosing that metric was to showcase that small fraction of people who are ordering once a week today, and that number should grow from where that is today. We're not planning to disclose that number every quarter, but maybe once in a while, you know, reasonable frequency, we can share an update, so that we know how that is progressing.
Thanks. Maybe the final piece is on the delivery partner order intensity. You mentioned that this is actually out of one. Any targets you have in mind over the next three, five years, and what are the specific steps to taking to kind of achieve that higher efficiency intensity therefore to drive kind of delivery charges lower? Kind of is this kind of where the Quick Commerce piece kind of fits in in terms of driving your order, I mean, the delivery partner order efficiency?
Yes. I think Quick Commerce will definitely add to that. I think even without that, there is a large room there for us right now to improve. Essentially it's a function of you know, reducing the idle time of delivery partners on our platform, right? As long as they're occupied all the time that they're logged into our system, you know, we would end up decreasing the overall cost of delivery while at the same time making sure that they make more money every hour. I think fundamentally, that's the principle and yes, as we plug more use cases into that, like with commerce, it's only going to get better.
Thank you, Mr. Suresh. May we request that you return to the question queue for follow-up questions. I take the next question from the line of Gaurav Rateria from Morgan Stanley. Please go ahead.
Hi. Thanks for the opportunity. The first question is on multiple levers on unit economics that you talked about commission rates, delivery fee, ad sales, delivery cost. What stage of journey these initiatives are? Some probably will fructify much earlier in the next one or two quarters. Some will take a little bit of a medium-term view to fructify. What is the risk that competition, you know, kind of toes the line or they don't toe the line? Because some of the indicated success of this will be a function of how competition behaves. What's your take on that?
Hi, Gaurav. Look, I think competition is not the only factor. I think it's we are a three-sided marketplace, right? Any imbalance in this marketplace makes the marketplace degrade very rapidly, right? It's important therefore that as we push along on our unit economics journey, we do it in a sustainable manner and hence, you know, if our stakeholders, like restaurant partners or delivery partners or customers, for example, are not seeing enough value in what we're offering to them, even without any competition, I think the marketplace will degrade, right? It's a very fine balance that we have to run with.
There are multiple variables, as you rightly said, which makes it very complicated to do this in a very linear way across each of these five, six levers, right? That's why we wanna stick to contribution as a metric and retain the flexibility of, you know, playing with the, you know, going up or down with individual elements. Our aim is to make sure that we improve on contribution from here on every quarter, without necessarily doing that for each of these specific individual levers. I mean, I hope I answered your question, Varun.
Yeah. You know, that's fair. Got it. The second question is around trying to understand the synergies between quick commerce and food delivery, both from an operation side as well as from a customer acquisition side, given that they both are operating as or they might operate as independent businesses. How should one think about a synergy both on operation and customer acquisition side?
These separate businesses is from a customer lens, right? I mean, if we do go ahead with different brands, then consumers think of it as two separate businesses. Behind the scenes, you know, it is an integrated tech, it is an integrated CRM, it is an integrated delivery fleet. I think that is where the synergies will come, both on you know, customer side where we have a large customer base on food delivery where which we can cross-sell with commerce and vice versa. Likewise on the delivery fleet side, operation side, which we just discussed, you know, where you know, the cost of delivery come down because of higher utilization and efficiency.
Yeah. Sorry to belabor on this point, but if I look at the delivery architecture for a quick commerce, it's from one point to multiple points of customers in the locality, whereas for food delivery, the delivery partners have to toggle between multiple restaurants at multiple locations, and then they have to deliver at multiple different endpoints, right? The delivery architecture looks very different. Does the integrated delivery architecture really work well, or I'm not sure if my understanding may not be correct.
Varun, this could be the situation today. I think of it this way, that in a slightly more mature market on both quick commerce and food delivery partner's job is to pick up something from point A and deliver it to point B, right? Whether that point A is a drugstore or restaurant, it eventually doesn't matter that much, you know, in a mature market. You know, these models therefore may start off differently because we wanna get to scale, we wanna get to SOPs which drive consistency in services and so on. Over time, I think the real value of the business will unlock once we integrate all of this in a fashion which makes it really tangible from a delivery perspective.
Got it. Last question. You had also taken an NBFC license, probably to do some activity around the fintech side. If you can elaborate on what exactly you're looking to do there, and will it be a capital-intensive business? Typically NBFCs are capital-intensive businesses, and that's the reason want to understand a little bit more clarity on what you're planning to do there. Thank you.
Yeah. Guarav, just to clarify, we haven't taken a license yet. I mean, we applied for it, and getting a license is a process in itself. You know, when we get it, we would see how exactly. See, the fundamental idea is to not think of it as a separate business right now. I don't think we're going to deploy meaningful capital in lending as a business. To just let NBFC to be an enabler for the growth of our restaurant ecosystem or delivery partner ecosystem, if we do see a way of doing that, you know, without risking meaningful capital. That's how we think about it.
Thank you.
Thank you. The next question is from the line of Ashwin Mehta from Ambit Capital. Please go ahead.
Yeah, hi. Thanks for the opportunity. Just one question in terms of the dining out business. You know, product refresh perspective, what are you looking to do in terms of this business? From a longer term perspective, this was what your original business was. From a longer term perspective, how do you see scale-ups in terms of this business? Because this, from a profitability perspective, should be additive to your business.
Yeah. Hi, Ashwin. Good to hear from you. Look, I think we can't share more details. I mean, we should wait for any product here. Don't wanna say anything beyond that. You are right. I mean, this has been a business which used to aid some of our losses in food delivery two years ago. You know, I think we know how to build this business better. Our context has changed in the last two, three years. Hence I think this side of the product needs a rethink and we're onto doing that right now. You know, once we have an update, we'll share it with you.
Just one more question in terms of, say your top 300 cities contribute almost 99% of your GOV. But in terms of indicators for how the remaining 700 or at least the 400 that we added earlier, how are things panning out there? Are we having to say subsidize delivery or spend materially in terms of discounting there to entice people?
Ashwin, most of these new additions are a few weeks old right now. Of the first 500 that we launched, right, we exited some cities, and the balance contribute pretty much, I mean, probably to 99% of the business. The last 500-odd cities that we launched post-October 2021. Some of them have been launched as recently as last couple of months. Very early right now. I explained our thought process behind how we look at city expansion and what we watch out for, and hopefully sort of that answers the question that you have. Happy to repeat that in case you missed that.
No, I'll kind of look up on that if I missed it. Just one follow-up in terms of Hyperpure business, and how does it fit in with your quick commerce strategy? Because one of the ways to make quick commerce profitable would be how you do the fresh supplies piece, and that's where Hyperpure could kind of come in. How are you thinking on those lines?
Yeah, actually I wish you did not ask that question because, yeah, that's one of the elements of synergy in our business, which is not very obvious, but it's going to be a big driver of better economics for us because, Hyperpure is a business that we've built over the last four to five years. It's become meaningful in size and growing well. Yeah, I think there are synergies there, which is what also excites us and gives us confidence about the economics of the commerce business as an integrated way.
Gotcha. Fair enough, Akshant. Thanks and all the best. All the best.
Thank you, Ashwin.
Thank you. Ladies and gentlemen, due to time constraints, we'll be able to take last two questions. The next question is from the line of Pranav Kshatriya from Edelweiss. Please go ahead.
Hi, thanks for the opportunity. I have two questions. Firstly, can you elaborate. Hello? Hello?
Yeah, Pranav. Hi, go ahead. Can hear you.
Yeah. Can you please elaborate, you know, this quarter's increase in contribution margin, how much impact this delivery cost reduction has happened and, you know, is the clubbing deliveries, you know, has been a major driver of that, is what I'm trying to understand.
First part, Pranav, we cannot answer. We don't want to share that. I think it's just fine detail. Your second question, we're not looking at batching orders as a big driver of our delivery costs going down, at least for now. I think in our minds it results in an inferior customer experience and there are enough low-hanging fruits to bring the delivery cost down at this point than starting to batch orders. Batching is a small percentage of our orders today, and we don't see that changing right now.
Sure. My second question is regarding you know the loan which has been given to Blinkit. Blinkit seems to be you know burning a lot of cash and you know you have extended the loan you know for the immediate capital requirement. Do you I mean you know qualitatively if you can answer if you know they will require funding in a shorter term or this will help them tide over for a much longer period. You know has the burn rate come down from when you you know funded them last time around? That is what I'm trying to understand.
Yes, Pranav. I think the losses are coming down. We've indicated that in our letter and I think they're well capitalized for the foreseeable future.
Okay. Thank you. That's it from my side. Wish you all the very best.
Thank you.
Thank you. The next question is from the line of Varun Ahuja from Credit Suisse. Please go ahead.
Yeah. Hi. Thanks for the opportunity. I think most of my question has been answered, but I'll just take one question on the grocery side. I just want to understand the thought process of putting this INR 400 million number. I know you mentioned there are a lot of competitors that are involved right now, and looks like it's a core business that you think as of now because all synergies you're talking about. So my understanding looks like given it's such a huge opportunity, the losses or the investments may be lot more higher than INR 400 million. Why are you constraining yourself with two years, INR 400 million? Is there anything else as in your business model? How did you arrive? Anything that you can share on that front? Thank you.
Varun, we think that's a lot of money for doing a business. We are not starting this business from scratch, right? I think the answer would have been different if we were to be a new business doing quick commerce. You know, we already have a business that is synergistic to quick commerce. I mean, we are a team that have gone through one cycle of building a business similar to that, right? I think so. I think that drives our thinking in terms of how much capital that we would need going from here, given what we know and also knowing that competitive intensity is actually going to come down from where we are today.
I think, given the markets and how they've changed in the last six months, we don't think we are in a scenario which is, I mean, like, had we been in the same environment as 2021 in terms of capital markets, we could have seen three, four more Quick Commerce startups getting funded, which would have made the environment way more competitive than what it is today. On the competitive intensity bit, we're actually happier than what we were five to six months ago, that it's come down and that also drives how we think about losses going forward. I think we should be able to. This current market environment gives us a good window to actually scale this business quickly without really spending too much capital.
This much, given the model that you are looking at, obviously at the outset, given you are working, you have a lot more detail working. If you have to build dark stores in each and every place and obviously looking at 15- 20 minutes, at the outset looks like the investment will be a lot more and obviously then to acquire customers. That's where the question is coming from. I understand you already have a business, but in terms of operating a dark store, maybe you require a little more physical presence.
Sure, Varun. Let's check and say once we get into this business, we can hopefully share more details with you at that point.
Sure. Thank you.
Thank you. Next question is from the line of Swapnil from JM Financial. Please go ahead.
Hey. Hi. Thanks for the opportunity. I had a couple of questions, actually. Your employee cost as % has been a sequential decline. Just wanted to know if you have done some retrenchment over there. Can you also give some sense on your current head count and will you need to add going ahead as we continue to scale up?
Yes. No head count reduction, Swapnil. We're not seeing any pressure on the employee cost. As I said, I think we don't plan to hire meaningfully from here on, and the cost, employee cost in general should grow with inflation from here today.
Okay. Any particular reason why sequentially the costs were down by around 70%?
Let me check that. Which number are you referring to on employee cost? I don't think the cost
Employee cost. It was INR 195 crore last quarter, and this quarter it is INR 181 crore.
Okay. Swapnil, let me get back to you on this. I'm not very clear on the question, so maybe we can connect offline and I can give you a clarification. In general, I would say that cost is stable, so this could be some understanding gap here, which I can fix separately.
Sure. No worries. The second question. You have mentioned that growth in your business in the past has not been linear, so can you give some sense on seasonality? How should we look at it? I would have presumed that IPL is something good season for you, but apart from for the rest of the quarters.
Yeah. The lumpiness in growth is, I think, partly because of seasonality, but largely is because of, I think, more larger macro factors and also the nature of industry and state of industry, I would say, or the category. I think it's been driven more because of that, where we saw intense period of compression in food delivery and then that there was consolidation. Right. I think the lumpiness was driven largely because of that in the past. There is some seasonality, but it's in our business, but not something, I mean, given our growth rates, which is really, I mean, that gets sort of overshadowed with our strong growth that we see quarter-over-quarter. Nothing much to add there.
Okay. Just one last question. In the P&L there is a mention of delivery and related charges. Can you explain how this is different from availability fees that we used to report it at the time of the IPO?
This is essentially all. I mean, this is payments or rather the payouts that happen to delivery partners net of the customer delivery charges, basically.
You basically mean this is the same as availability fees, which was at the time of-
Just the same.
Yes. Thank you a lot for answering my questions. Yes.
Thank you.
Thank you. Ladies and gentlemen, that was the last question for today. We will now conclude this conference call. Thank you for joining us, and you may now disconnect your lines.