India’s Eternal Q4 profit drops on higher quick commerce investments

India’s Eternal, previously known as Zomato, reported a drop in fourth-quarter profit on Thursday as it continued to face pressure from higher spending for its quick commerce platform.

Eternal’s consolidated net profit fell nearly 78% to 390 million rupees ($4.6 million) in the quarter ended March 31, compared to 1.75 billion rupees a year ago.

Quick commerce, which involves delivering items from milk to mobile phones in less than 15 minutes, has become a fiercely competitive space, with companies jostling for market share.

Top players have ramped up discounts and subsidized deliveries while pouring money into opening more warehouses to deliver orders.

Eternal’s quick commerce platform Blinkit competes with rival Swiggy’s Instamart and start-up firm Zepto.

Revenue from Blinkit more than doubled year-on-year to 17.09 billion rupees, compared to 7.69 billion rupees a year earlier.

In comparison, adjusted revenue growth in Eternal’s food delivery platform Zomato was 17% higher year-on-year at 24.09 billion.

The surge in investments has delayed the path to profitability, especially for Blinkit, despite its higher market share. Swiggy’s Instamart, its closest rival, is facing similar pressure.

Blinkit’s adjusted core loss widened to 1.78 billion rupees in the fourth quarter from 370 million rupees last year.