In the above interview, Deepak Shenoy talks about how qcom companies have “side deals” with some other companies for inventory. Can someone shed some light on this? Here’s what I could gather and correct me if I’m wrong in my understanding:
Zomato acquired Blink Commerce Pvt Ltd (aka Blinkit marketplace) in 2022. However, all the inventory is held on the books of a different company called Hands On Trades Pvt Ltd (HOTPL) which is not owned by Zomato. I think Zomato owns a small minority stake in HOTPL.
I concur that such an arrangement might be asking for regulatory trouble w.r.t. related party transactions and what not. Is this common in the retail industry?
@madhavojha pointed out a few days ago that the KMP of a few dominant vendors on Blinkit have connections with the KMP of Zomato. That might or might not be related to this “side deal” thing, but is equally interesting/concerning.
The revenue recognition from Blinkit in Zomato’s financial statements is only to the tune of take rates on the products sold to the end customers through the Blinkit marketplace. I think it’s similar for Swiggy Instamart too. But revenue recognition for Zepto and BigBasket seems to be money received from the customers for the products sold? Does this mean Zepto and BigBasket do not have such “side deals”?
I’m just trying to understand the supply chain and inventory side of things for Blinkit and retail companies in general.
Disclosure: Holding since before Blinkit was acquired and sold some around 280.
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