Online food delivery firm Zomato Ltd said its revenue from operations for the December quarter rose from both a year earlier and sequentially, even as its loss shrank.

Zomato said it saw 9 per cent growth in revenue from operations on a quarterly basis, while its customer delivery charges shrank 22 per cent. “This was driven by an INR 7.50 per order reduction in customer delivery charges in Q3 FY22 as compared to Q2 FY22,” Zomato said. “We are seeing higher return on investment with discounted delivery charges as compared to coupons. As a result, discounts per order reduced by INR 5 per order in the last quarter as compared to Q2 FY22,” it said.

“We believe that the weak Q-o-Q growth in GOV was primarily due to a reduction in customer delivery charges as mentioned above, in addition to a soft impact of post-Covid reopening (including some shift from delivery to dining out),” the company said in its earnings report.

Zomato said over the years, unit economics in its food delivery business has improved with scale. The contribution margin (as a percentage of GOV) has improved steadily from a negative 15 per cent in 2019 to 1 per cent today, it said.

“We are very bullish on the product-market fit, unit economics, as well as the growth trajectory of the quick-commerce category. It reminds us of the food delivery category a few years ago when many platforms competed over a large and growing market but ultimately only the few who delivered exceptional experience to their customers survived,” Zomato said in its latest earnings report. “We are becoming increasingly confident in our decision to invest behind market leadership here with healthy unit economics.”

“We want to continue making minority equity investments in businesses that will accelerate growth of our business. We aim to work together with founders of other companies in a symbiotic relationship and utilise their expertise to strengthen and support our business,” the earnings report said.