Zomato’s profitability has seen a significant boost in recent quarters, thanks in large part to its B2B vertical, Hyperpure. Launched in 2018, Hyperpure is a key component of Zomato’s strategy to diversify its revenue streams and reduce its dependence on the highly competitive food delivery business.
How Hyperpure is Enhancing Zomato’s Profitability
Hyperpure serves as Zomato’s farm-to-fork initiative, supplying high-quality ingredients directly to restaurants. This vertical has been instrumental in driving Zomato’s financial turnaround, contributing to an impressive 27% sequential growth in revenue during Q1 FY25, reaching ₹1,216 crore. This is a significant increase from ₹951 crore in the previous quarter, and more than double the revenue from the same period last year.
Key Drivers of Hyperpure’s Success:
1. Direct Sourcing and Cost Efficiency: By eliminating middlemen, Hyperpure ensures cost-effective operations. This has allowed Zomato to offer competitive pricing to restaurant partners while maintaining healthy margins.
2. Scalability and Expansion: Hyperpure has rapidly expanded its reach, now serving thousands of restaurants across multiple cities. This scalability has been a crucial factor in its growing contribution to Zomato’s overall revenue.
3. High Average Order Value (AOV): Hyperpure’s orders have a high AOV, which significantly contributes to covering operational costs, thus bolstering Zomato’s overall profitability.
Future Outlook for Zomato and Hyperpure
As Zomato continues to scale Hyperpure, this vertical is expected to play an even more significant role in the company’s growth strategy. The steady revenue streams and strong margins from Hyperpure could potentially overshadow the contributions from Zomato’s traditional food delivery business, making it a critical pillar in Zomato’s quest for sustained profitability.
FAQ
1. What is Hyperpure?
Hyperpure is Zomato’s B2B vertical that supplies high-quality ingredients directly to restaurants, playing a key role in its profitability.
2. How has Hyperpure impacted Zomato’s revenue?
In Q1 FY25, Hyperpure’s revenue grew by 27% sequentially, reaching ₹1,216 crore, making it a significant contributor to Zomato’s overall financial performance.
3. Why is Hyperpure important for Zomato’s profitability?
Hyperpure’s high average order values and cost efficiencies have significantly improved Zomato’s EBITDA margins, making the company more profitable.
4. What are the future prospects of Hyperpure?
As Zomato continues to expand Hyperpure’s operations, it is expected to become an even larger revenue driver, potentially surpassing the food delivery business in importance.
5. How does Hyperpure differ from Zomato’s other businesses?
Unlike Zomato’s consumer-facing businesses, Hyperpure focuses on the B2B market, providing direct supply chain solutions to restaurants, which helps stabilize revenue and reduce reliance on the volatile food delivery market.