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Informist, Wednesday, Jul. 22, 2026

 

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--Eternal: Discount-led growth not sustainable in long term 
--CONTEXT: Eternal's management at post-earnings conference call 
--Eternal: Aim to pass on business upscale benefits rather than offer discount 
--Eternal: Adding 10 kitchens on platform every quarter 
--Eternal: Blinkit business growing faster in non-metro cities than metros

 

By Avishek Rakshit & Astha Oriel

 

KOLKATA/NEW DELHI – Online food delivery and quick commerce company Eternal Ltd. Wednesday said it will pass on the benefits of scale to its customers rather than offer discounts on its platforms to grow the business. It is of the view that continuing with discounts or offering more discounts to attract customers is not a feasible way to grow the business.

 

Typically, as companies expand and reach sizeable scale of sales, the average product cost or input cost declines when sales volume increases. Some companies achieve this by spreading fixed costs across more units such as plants, or warehouses, or dark stores and by securing bulk discounts on input costs such as raw materials.

 

"The pressure on us needing to discount just to maintain competitiveness on price will go down. Even with that, the prices can come off at scale. But that's then a choice that we make to pass on the benefits of scale to customers rather than actually trying to compete with price with someone else," a senior company official told sector analysts Wednesday in a post-earnings call. 

 

The official said that when discounts are offered to customers either to acquire new customers, or increase the value of their online purchases, these discounts balloon and amount to significant losses. Companies which pull in customers by offering discounts cannot fall back on this as customers will be lost eventually once the competition offers higher discounts. 

 

"I think this is also coming from our own experience in the past. I think like a couple of years ago, when you were building out this business, we were in many cities, major cities, number three or four players. And, you know, our initial approach in those markets, like typically commerce thinking is that, look, let's start discounting and get customer," the official said. "And over time, the investment will pay off. And that didn't work for us initially in some markets. So, eventually what worked was working on the infrastructure growth." 

 

The official said that Eternal faced increased competition in the June quarter as the number of quick commerce players increased and companies became aggressive. 

 

"But when we look at competitive intensity and the way that it has evolved over the last few quarters, what we are seeing is that most of the competition is coming in providing subsidies to customers on products and also on delivery fees. And that is what has become more predictable that most competitors are going towards grocery subsidising, which we are fairly clear on what we do in that and what is the kind of impact that this has on the business," the official said. 

 

However, despite heightened competition, Eternal saw the net order value on its food delivery platform, Zomato increase to INR 107.7 billion in the June quarter from INR 97.6 billion in the March quarter. This led the adjusted revenue from food delivery operations to increase 13% on quarter to over INR 35 billion. The company has been adding 10 cloud kitchens to its platform every quarter. 

 

Revenues from its quick-commerce business also increased over 18% on quarter to nearly INR 157 billion in the June quarter as the net order value increased to INR 171.3 billion from INR 143.9 billion in the March quarter. On a like-to-like basis, which discounts revenue from new dark stores, the top line from quick commerce rose 22% on quarter.

 

For its long-term growth, Eternal is investing in assortment depth, geographic expansion, and supply chain infrastructure. The official said infrastructure-led growth builds operating leverage for the company and adds capacity that serves more customers at lower marginal cost.

 

Responding to a question from a sector analyst, the company official said its quick commerce business, housed under the Blinkit brand is growing faster in the non-metro cities and towns as compared to the growth in metro cities where competitive intensity is high.

 

Wednesday, shares of Eternal closed 0.77% down at INR 284.40 on the National Stock Exchange. End 

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Edited by Deepshikha Bhardwaj

 

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