INTRODUCTION

Background of the companies

Zomato, an Indian restaurant aggregator and food-delivery public limited company, was
established in 2008 by Deepinder Goyal and Pankaj Chaddah. Throughout the course of its
existence, the Company has undertaken a series of endeavours to broaden its scope of
operations within the borders of India, as well as across a total of 23 distinct nations. Zomato,
a company operating in the food delivery industry, has successfully secured a cumulative
amount of $2.5 billion in funding through the issuance of equity shares since the year 2010.
The aforementioned entity, herein referred to as "the Company," has engaged in the
acquisition of a total of fourteen separate companies subsequent to the year 2008, despite its
status as a startup. Zomato, a prominent food delivery platform, engaged in a transaction on
the 21st of January 2020, wherein it acquired UberEats. This acquisition was executed
through the exchange of stocks exclusively, without any cash involvement. Subsequently,
Zomato proceeded to acquire Blinkit, a startup specialising in instant grocery services. The
value of this acquisition amounted to Rs. 4,447 crores ($569 million), and like the previous
transaction, it was also conducted solely through the exchange of stocks.

Blinkit, previously operating under the name Grofers, was founded in December 2013 by
Albinder Dhindsa and Saurabh Kumar in Delhi. It was established as a platform for the
immediate delivery of groceries. Throughout the course of its existence, the company
progressively broadened its scope of activities, extending its reach to encompass various
prominent urban centres within the territorial boundaries of India. Blinkit has successfully
secured a cumulative sum of $1 billion by means of equity financing. On the specified dates
of April 10, 2015 and October 27, 2015, Blinkit successfully completed the acquisition of two
companies, namely Mygreenbox and Townrush. During the month of August in the year
2021, Blinkit put forth a proposition to attain the esteemed status of a Unicorn company. This
proposition was made possible by securing a substantial amount of $120 million in funding
from Zomato and Tiger Global. On the aforementioned date, Zomato Limited's Board of
Directors granted their approval for the acquisition of Blinkit at a valuation of Rs. 4,447
crores. The completion of the transaction occurred in late August of the year 2022.

The aggregator business model refers to a type of business that acts as an intermediary
between consumers and multiple suppliers or service providers. This model involves
collecting and organising information or products from various sources and presenting them
to consumers in

Online food delivery businesses that operate on the aggregator model enable numerous
restaurants to register and operate on a unified platform for food delivery. The
aforementioned business model involves the consolidation of services provided by multiple
restaurants, which are then combined and made available through a unified online platform.
In this particular model, it can be observed that the platform assumes the role of an
intermediary entity, facilitating the interaction and transactional processes between customers
and restaurants.
Several prominent players in the food delivery sector, such as Just Eat, Delivery Hero, and
Uber Eats, have embraced the aggregator model, resulting in remarkable and rapid expansion
of their operations. When contemplating the establishment of a food delivery platform akin to
Just Eat and Delivery Hero, it is advisable to consider the adoption of the aggregator business
model.

ANALYSING FROM BUISINESS PERSPECTIVE

The underlying purpose of Zomato's acquisition of Blinkit can be understood through a legal
lens. Zomato, as a business entity, sought to acquire Blinkit with the intention of furthering its
strategic objectives and expanding its market presence. This acquisition was driven by
Zomato's desire to enhance its technological capabilities, improve its delivery operations, and
ultimately strengthen it.

The expeditious realm of commerce

Zomato expressed its intention to enter the e-commerce grocery sector, an industry currently
dominated by Amazon Pantry, Big Basket, Grofers, Swiggy, and other established
participants. The aforementioned Company, an established entity operating in the realm of
multinational food delivery and restaurant aggregation, made repeated attempts to venture
into the domain of quick commerce grocery and essentials delivery service, albeit without
success. Zomato, a popular food delivery platform, implemented a grocery delivery service
with a promised delivery time of 45 minutes in April 2020. This initiative was undertaken in
response to the COVID-19-induced lockdown, which resulted in the closure of numerous
restaurants. Subsequently, subsequent to the cessation of the lockdown measures, the
aforementioned company proceeded to recommence its provision of food delivery services.
Zomato, a prominent player in the industry, resumed its operations in July 2021. However,
due to encountered logistical challenges, it was compelled to terminate its activities in
September 2021. By means of its acquisition of Blinkit, Zomato has effectively positioned
itself in a favourable position within the competitive landscape.

The sharing of a customer's wallet is a legal concept that pertains to the division or
distribution of a customer's financial resources or assets among multiple parties.

It is anticipated that Zomato's market share in customer wallets will experience growth
subsequent to its acquisition of Blinkit. Additionally, the company intends to incorporate a
Blinkit tab and a Hyperpure tab within its application. These tabs will enable customers to
conveniently place orders for groceries and other essential items, in addition to their usual
food orders from restaurants. It is worth noting that Hyperpure, a business-to-business
supplier for restaurants, will also be accessible through this feature. Zomato has been actively
pursuing strategies aimed at consolidating its customer base by integrating various ideas
across its subsidiary platforms within a single framework.

Decrease in costs on delivery

Zomato has the potential to achieve cost reduction in its delivery operations through the
implementation of a shared delivery fleet arrangement, provided that both companies agree to
participate in such an arrangement. Blinkit, a commerce platform focused on speed, operates
with a delivery system that is time-constrained, in contrast to Zomato's standard food
deliveries, which rely heavily on variables such as distance and quality assurance.
Furthermore, due to the requirement of timely delivery, the number of orders placed per hour
is higher in comparison to standard food delivery orders. The Company seeks to make
strategic investments in developing the infrastructure and support systems necessary for the
food delivery industry. This is intended to result in a gradual reduction in operational
expenses associated with running an efficient food delivery business.

In times of economic hardship, it is imperative to explore and capitalise on opportunities for

enhanced synergistic relationships.

The delivery industry as a whole is currently encountering challenges, and the process of
consolidation could potentially assist in effectively managing this crisis. The economic
landscape of the business has undergone significant transformation within the past half-year.
This transformation is primarily attributed to the increased costs of fuel and the limited
availability of delivery personnel, both of which have resulted in a notable surge in delivery
expenses. this ultimately results in an increase in average order values (AOVs) and
customers being required to spend more money.

Furthermore, as urban areas resume their operations and vehicular congestion returns to pre-
pandemic levels, there has been a decrease in the average number of deliveries made per
individual. The temporal duration of a task that could be completed within a span of 10
minutes in the previous year has now escalated to a range of 15-17 minutes, signifying an
increase in the time required for its completion. When considering the concept of quick
commerce, it becomes apparent that the only viable approach to ensure faster deliveries
would involve the creation of additional dark stores. This, in turn, necessitates a capital
expendit

the likelihood of achieving success is higher when Zomato and Blinkit collaborate rather
than pursuing their individual endeavours, particularly due to the similarity in their target
customer base. The efficiency of fleet utilisation will improve as delivery personnel can be
assigned to fulfil a greater number of orders in these two scenarios.
 Zomato will find it more manageable to retain its delivery fleet because the company has the
ability to allocate a specific portion of its earnings towards them. According to analysts at
Edelweiss, the cost of fleet delivery can be decreased by 5-10% through increased fleet
utilisation. The extent of this reduction depends on factors such as order density and the
proportion of benefits that are retained by the platform. This information was provided in a
note by Edelweiss. According to the statement provided, Zomato aims to attain synergistic
benefits through the integration of its delivery fleet. This integration is expected to enhance
the concentration of orders and subsequently reduce the cost associated with each delivery.

The case at hand pertains to the Swiggy model

the efficacy of combining rapid commerce and food delivery has already been exemplified by
the Swiggy model. According to Danak, the decrease in food orders due to people dining out
was counterbalanced by the growth of Instamart, resulting in overall numerical growth for
Swiggy. Swiggy has effectively utilised its delivery fleet and reallocated it for various
additional purposes. The integrated application offered by Swiggy serves to enhance user
engagement and, significantly, reduce the expenses associated with acquiring new customers.
According to analysts, Instamart's fill rates are elevated due to the presence of a greater
number of stock keeping units (SKUs) and a wider delivery area. Additionally, Instamart
exhibits a higher average order value (AOV). However, it is worth noting that the delivery
timeline for Instamart is comparatively longer, ranging from 35 to 40 minutes, in contrast to
quick commerce players who solely focus on prompt delivery services.
Analysing it from legal perspective