Mastering Quick Commerce In India

Mastering Quick Commerce In India
"Blinkit's mission is to 'make instant commerce indistinguishable from magic'. The strongest testament to whether there is a need or not is demonstrated by our strong customer loyalty," said Albinder Dhindsa, Founder, Blinkit.

By Charu lamba , Deputy Editor

09 Jan 2023 | 9 min read

Founded in 2013, Grofers was set on a mission to empower small retailers with an online presence. Over the next two years, the company evolved into a hyperlocal logistics company focused on groceries. Grofers became synonymous with grocery delivery in India. As it scaled up, it built its marketplace platform and set up the entire fulfillment supply chain. Within a year, it had set up 22 warehouses in 10 cities. It continued scaling with a strong focus on fresh groceries, attractive deals, timely delivery, and reliable service. With Covid, it increased its focus on serving all essential needs. As the market for online grocery matured more, it saw a huge inflection point for quick commerce. 

“In early 2021, we pivoted our business model to an experience-first platform and started our quick commerce journey. We re-branded ourselves to Blinkit to reflect this new vision and are now serving millions of customers each month through our 400 dark stores with a fleet of 25,000 delivery partners,” asserted Albinder Dhindsa, Founder, Grofers.

Grocery is the hook for quick commerce, but it is not just about groceries. Quick commerce naturally extends across multiple categories including beauty & personal care, electronics, OTC pharma, stationery, other gift items, etc. Categories other than grocery help the quick commerce business make higher margins and attain higher AOVs. The total commerce market in India is $1.3 trillion and in the long term, quick commerce is expected as emerging as a significant channel of demand for customers at least in the top cities.

Seeing the untapped potential in quick commerce space, in June 2022, Zomato acquired Blinkit for Rs 4,447 crore (about $568 million) in an all-stock deal. Earlier, Zomato first invested in Blinkit in August last year.

“Success in quick commerce is heavily dependent on an efficient hyperlocal delivery network. Zomato has a natural advantage here given the millions of food orders that we deliver. That said, hyperlocal delivery alone cannot drive success in quick commerce. That’s where Blinkit comes in with its deep understanding of product-supply chains that involve warehousing, movement of goods from warehouses to dark stores, monitoring inventory stored in various locations, optimizing picking and packing of orders, among others,” elaborated Deepinder Founder and CEO, Zomato in a blog post.

“Blinkit’s proprietary tech stack, tailored for supply chain operations is the backbone of its operations. Blinkit also has rich experience in merchandising and facilitating relationships with a host of brands and third-party suppliers, which reduces our time to market. The below chart captures how Zomato + Blinkit can be a winning combination for a successful quick commerce play,” he further added.

Nailing The Quick Commerce Game

Over the years, the adaptability of online purchase behavior has increased. Users are more comfortable with even buying fresh items online with no concerns about quality. Increasingly, Blinkit has also seen increased importance given to convenience. Any company such as Blinkit has to keep adapting to meet the users’ needs and that is what it has done throughout all these years. 

“Blinkit’s mission is to ‘make instant commerce indistinguishable from magic’. The strongest testament to whether there is a need or not is demonstrated by our strong customer loyalty. As to why we think we are capable of delivering this promise - the answer lies in the proprietary tech that we have developed over the years.  Our technology and data capabilities enable our merchant partners (retailers) to keep relevant products for the communities living in their area. This ensures customers get everything they asked for within minutes. Our tech also enables our partner staff to pick up and pack an order within 2 minutes of the customer placing it. On the other end, our delivery partners love that they now invoke smiles with our speedy service. This quickness, however, doesn’t come at the cost of safety. Our network of stores is so widely spread across cities that we have a store live almost every 2 kilometers. The average delivery speed for our fleet is less than 20 km per hour, which is possible only due to the efficiency of our systems and cluster of stores, coupled with our in-house technology,” asserted Dhindsa.

“To keep up with our customers in the quick delivery ecosystem, we are always looking for newer opportunities to serve them better. For instance, we recently introduced Apple products on our platform and received encouraging feedback for the same. It was a pleasant surprise to learn that there are customers who want to get their iPhones delivered to their doorstep within minutes. Similarly, we also introduced printing services. Serving customers consistently for all their needs is what we are focused on,” he further added.

Last quarter, Blinkit did 26.1 million orders, and its current average cart value is ~Rs 568. Every month, it serves over 2.6 million customers, on average, in India. 

Options Galore

Blinkit currently operates in 23 cities: Ahmedabad, Bengaluru, Chandigarh, Chennai, Delhi, Faridabad, Ghaziabad, Gurugram, Hyderabad, Jaipur, Jalandhar, Kanpur, Kolkata, Lucknow, Ludhiana, Meerut, Mohali, Mumbai, Noida, Panchkula, Pune, Vadodara, and Zirakpur.

“We offer a variety of lifestyle products to our customers ranging from fresh fruits and vegetables, dairy and meat, staples, ice-creams to other household items. We are actively expanding categories to fit in more use cases like electronics, beauty, etc. This year with our partnership with Apple re-seller Unicorn, we also launched Apple 14 on Blinkit and delivered iPhones and other apple accessories to our customers in minutes,” he stated.

Blinkit's tie-up with Unicorn marked the first time Apple products were made available to customers on a quick commerce platform like Blinkit, where they can get their hands on iPhone, Apple Watch, Airpods, and multiple Apple accessories within minutes

Future Plans

Blinkit is already synonymous with quick commerce in the country. It plans to continue building on that to be able to provide reliable and consistent service to its customers across a majority of use cases that they need.

“We will continue adding categories and geographies that will make sense to our business while working on the P&L simultaneously to ensure healthy unit economics,” he said.

In Q2FY23, Blinkit’s Gross Order Value grew 26 percent quarter-on-quarter to Rs 14.82 billion while the revenue grew 44 percent quarter-on-quarter. Adjusted EBITDA loss in quick commerce reduced to Rs 2.59 billion from Rs 3.26 billion in the previous quarter (Q1FY23) leading to Adjusted EBITDA of -17.5 percent in Q2FY23 as compared to -27.8 percent in Q1FY23.

Founded in 2013, Grofers was set on a mission to empower small retailers with an online presence. Over the next two years, the company evolved into a hyperlocal logistics company focused on groceries. Grofers became synonymous with grocery delivery in India. As it scaled up, it built its marketplace platform and set up the entire fulfillment supply chain. Within a year, it had set up 22 warehouses in 10 cities. It continued scaling with a strong focus on fresh groceries, attractive deals, timely delivery, and reliable service. With Covid, it increased its focus on serving all essential needs. As the market for online grocery matured more, it saw a huge inflection point for quick commerce. 

“In early 2021, we pivoted our business model to an experience-first platform and started our quick commerce journey. We re-branded ourselves to Blinkit to reflect this new vision and are now serving millions of customers each month through our 400 dark stores with a fleet of 25,000 delivery partners,” asserted Albinder Dhindsa, Founder, Grofers.

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