Analyze the Decline: Why Zomato's Share Is Falling Today

Zomato shares were down Today after reports suggested Flipkart is launching a number of dark stores, intensifying competition in the quick-commerce segment.

What Happened

Flipkart is planning to launch 100 dark stores across the top cities ahead of its Big Billions Day sale, the ( ET) Economic Times reported

What is Dark Stores

Dark stores are small warehouses used to store the products to be delivered.

The company is reportedly planning to expand more and capture market share in the fast delivery segment, which includes non-grocery segments. By this move, Flipkart will take on companies like Zepto, Zomato's Blinkit and Swiggy Instamart in the quick-commerce space.

Flipkart will reportedly launch Flipkart Minutes with the delivery of vegetables, fruits, grocery and electronics.

Google reportedly invested around around ₹2925 crore in Flipkart in a funding round in May.

This news comes after Zomato's plans to invest ₹300 crore in Blinkit to prepare itself for the battle in quick commerce. The food delivery company had said in May that it plans to reach 1,000 Blinkit stores by the end of FY25. The quick commerce arm reported a revenue of nearly ₹770 crore and broke even at the EBIT level, which came in at ₹2 crore in the March quarter.

Price Action: Shares of Zomato were down 3% to ₹221.01