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The Indian food delivery giant Zomato has announced a significant corporate restructuring, culminating in the proposed renaming of its parent company from Zomato Ltd. to Eternal Ltd. This decision, driven by the substantial success of its quick-commerce subsidiary Blinkit, marks a pivotal moment for the company and reflects its evolving strategic direction. The move, announced by Zomato's group CEO and co-founder Deepinder Goyal, signifies a shift from solely focusing on food delivery towards a broader portfolio of businesses under the Eternal umbrella. Goyal's statement reveals that the name 'Eternal' was initially used internally to differentiate the overarching company from its flagship Zomato brand. The adoption of 'Eternal' as the official corporate name now signifies the integration of Blinkit and other ventures into the core identity of the company, indicating a larger vision that extends beyond its initial focus on food delivery.
The rationale behind this name change is multifaceted. Firstly, it reflects the company's ambition for sustained growth and long-term viability. The name 'Eternal' projects an image of endurance and permanence, suggesting Zomato's commitment to overcoming challenges and remaining a significant player in the evolving Indian e-commerce landscape. Secondly, the renaming underscores the strategic importance of Blinkit's rapid expansion. Blinkit, a quick-commerce platform offering rapid delivery of groceries and other essential items, has emerged as a significant revenue driver for the company, challenging the traditional food delivery model. By integrating Blinkit and other businesses – including District and Hyperpure – under the Eternal banner, Zomato seeks to showcase its diversification beyond its initial food delivery core competency. The renaming serves as an acknowledgment of this diversification strategy and its anticipated role in the company's future success.
However, the transition is not without its complexities. While the company's board has approved the name change, it still requires the approval of its shareholders. This indicates a degree of risk associated with the decision, as shareholder approval is not guaranteed. Should shareholders reject the proposal, the renaming process would be halted. This highlights the significance of the decision and the importance of stakeholder engagement in driving the company’s future. The decision also comes at a time when the core food delivery business faces a slowdown in demand, similar to what its main competitor, Swiggy, has experienced. This slowdown, reported during the latter half of November, has led to a decline in consolidated profit after tax (PAT) in Q3FY25. Despite the revenue increase, the decline in profit illustrates a potential concern that needs to be addressed in the company's future strategies. This makes the rebranding a high-stakes endeavor, dependent upon the success of Blinkit and other ventures under the Eternal brand to offset challenges in the core food delivery business.
Goyal’s candid admission that the name ‘Eternal’ is both “a promise and a paradox,” reveals the weight of expectation placed on this new identity. The name itself carries a significant burden, reflecting the company's commitment to lasting success and its awareness of the challenges ahead. It implicitly acknowledges the risks involved in such a significant rebranding effort and implies an ambitious long-term strategy. The change signifies a significant shift in corporate identity, moving beyond the single-product focus of Zomato to a larger, more diversified corporate structure. This strategic move will undoubtedly shape the company’s public perception and influence investor sentiment. The success of this rebranding will depend not only on shareholder approval but also on the continued growth of Blinkit and the successful integration of all businesses under the Eternal umbrella. This renaming is a gamble, a bold move with the potential for substantial rewards or significant setbacks, showcasing the inherent risks and opportunities within the competitive world of e-commerce.
Furthermore, the decision to keep the Zomato app name unchanged highlights a strategic understanding of brand recognition and consumer loyalty. While the parent company undergoes a rebranding, maintaining the familiar Zomato app name assures consumers that the quality and service they have come to expect remain intact. This is a crucial consideration in navigating such a transformative period. The success of this strategy rests heavily on the ability of the company to successfully integrate its different divisions under the Eternal banner while maintaining the brand recognition and customer loyalty established by the Zomato brand. This delicate balance between corporate rebranding and consumer familiarity is a key challenge for the company's ongoing success. Overall, Zomato's transformation into Eternal represents a high-stakes gamble, a pivot that demands successful execution and a willingness to adapt to the dynamically changing Indian market.
Source: Zomato board approves company name change to Eternal