‘Blinkit Will be Larger Than Zomato’: CEO Deepinder Goyal on the Food Delivery Major’s Future Strategy
Zomato Co-founder and CEO Deepinder Goyal on its business model, acquisitions, and more Deepinder Goyal, 41, is a reticent person. Not known to give too many interviews, the Co-founder and CEO of food delivery platform Zomato meets Business Today on a cold afternoon at his sprawling Dera Mandi farmhouse in the capital. In the midst of lunch—soup and salmon ordered off Zomato—he speaks on what makes his company different, its acquisitions, and business model, among other things. Edited excerpts:
Why is the present moment so interesting for Zomato and its businesses?
A lot has happened in the past leading to the present moment. People have got to leadership roles in 15 years, with many of them having [grown up]… in Zomato. It has led to the creation of the culture [of Zomato], and I don’t think they know any other way to work.
As a business, we are never comfortable. To put it bluntly, it is about always being in survival mode. We have been through so much to make us aware that everything is temporary. Normally, if the team is doing well, everyone would want to chill but that’s not how we go about it.
Zomato has always grown in spurts. If you had asked me five to six years ago, where I would be today, I would have had no answer. Even today, we probably have a 20% clue of where we will be two years from now and that’s because the environment changes so fast and we must also adapt. For instance, who thought Blinkit would have got here? Now, we suddenly have a lot more ideas on how we can expand further. At the time of buying it, it was more of an if; now is about when.
And what can you say about your own entrepreneurial journey?
I don’t like to look back, plus we tend to remember more of the negatives. It leads to baggage. All the positives we learnt are a part of the present and that is most important. I like the dynamism of the present with respect to the composition of the team and the chemistry that comes with it. Culturally, they are very aligned with the values and much of that is not always easy to articulate. Being frugal, for instance, is not always to cut back on expenses but we do learn what it means over time.
The big thing is we are one of the biggest users of our services. I use both our products at least twice a day if not more. If we do that, we are always seeing gaps and therefore, it becomes a never-ending journey.
Speaking of filling gaps in the portfolio, how has Blinkit changed the business?
At that time [when it was acquired], it was a culmination [of] everything that we learnt about customer first… Albi [Albinder Dhindsa, Founder & CEO of Blinkit] and I had the right amount of trust. Blinkit will be larger than Zomato in one-tenth the time. The scale it brings to the table is huge. We don’t really think [about the] portfolio. Blinkit was about wanting something quickly.
Zomato does not exist in that business. From a customer point of view, we thought, “Who would want anything in 10 minutes?” Then, we piloted the concept in a store next to our office and when things started getting delivered in 10 minutes, it was a very different feeling. There was something magical about 10 minutes. It’s not a crazy timeline and its cheaper to do a 10-minute model since distances are lesser. People said, “it costs more”, but we said, no!
This is not a pan-India model and there is no need for it to be one. This is a hyperlocal model, and the density of population determines the opening of a store. Zomato has data on population and driving distance. That data is used for Blinkit store-mapping. It has been made simple, but it’s really the outcome of hard work. The current outcomes are a reflection of what was done 12 months ago. Plus, a lot of things can go right or wrong.
How do you deal with success or failure?
Things go up and down. I don’t look at it this way—rather it is discrete and granular for me. It is a sequence of events.
The buyout of Hyperpure in FY19 was an interesting deal. How did you view it then?
It is only 10% done and has a long way to go. We look at it as a 25-year bet in terms of playing out. It was set up to clean the supply chain in food. Ordering better food is always the objective. From a financial point of view, it is not a long-gestation game but achieving that vision of supply chain of food or just better food is a long haul.
Do investors take time to understand new-age businesses?
The difference between new and old age in my view is that the latter has capex, but we don’t. They depreciate the capex and report Ebitda. Our capex is all about technology, building brands, restaurants onboarded. We must be looked at as being asset-heavy or asset-light and that needs to be understood. We keep it simple—account for all costs and revenue and if I can’t predict the future, how do I move businesses to the future? People are starting to get it now.
There were some prominent exits right after Zomato got listed…
I was hopeful that the IPO will not change the commitment levels. Obviously, a lot changed in their lives, and they saw a lot of money suddenly. Half the folks who quit did not agree with themselves that they were done. Their behaviour at work was not about being proactive but only reactive. Retirement mode had set in and in hindsight, I thought it would happen. I let it fester and spoke to them to get their mindset back in shape. Finally, I had to take over. It was not an easy decision but [it] had to be done. This is a dynamic environment, and you have to change.
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