Born as Grofers in 2013, Blinkit has become a sensation in India. From milk to smartphones, Blinkit’s delivery riders zip through streets to fulfill over a million orders per week. How’s that for fast service?

Behind this rapidly growing startup, led by IIT graduate Albinder Dhindsa, is a technology-charged vision to make buying household essentials virtually frictionless. Let’s dive into the success story of this Indian startup unicorn that’s made old-fashioned grocery errands seem downright slow.

Meet Grofers – Where It All Began

Grofers (now Blinkit) is one of India’s leading online grocery delivery platforms, with over 10 million registered users and 1.5 lakh daily orders. Founded in 2012 by Albinder Dhindsa, a former Flipkart executive, Grofers started as a grocery store that delivered within 90 minutes.

However, the company faced several challenges in scaling up its operations, like high costs, low margins, intense competition, and regulatory hurdles. In 2017, Grofers raised $200 million from SoftBank and other investors to expand its presence across India and abroad.

However, the company also reported losses of over $100 million in 2018-19 and had to lay off over 1,000 employees. To survive and thrive in the online grocery market, Grofers decided to pivot to a new business model that focused on quick commerce.

Quick commerce is a segment of e-commerce that offers fast delivery of small quantities of goods within 10 minutes or less. The company launched its quick commerce service in August 2021 under the name Blinkit, with a promise of delivering most of the stuff customers need in their daily lives.

Zomato’s Acquisition of Blinkit

In June 2022, Zomato’s acquisition of Blinkit was a step to tap into the booming quick commerce trend. Zomato wanted to offer more than just meals, aiming to deliver groceries quickly too. The purchase of Blinkit fit perfectly into Zomato’s plan.

By blending Blinkit’s quick commerce know-how with Zomato’s food delivery platform, they created a seamless solution for users. Zomato hoped this combo would boost customer loyalty and market share. Additionally, the acquisition helped Zomato address concerns about its stock value dipping. The $569 million deal, despite a 43% valuation cut for Blinkit, reinforced Zomato’s commitment to growth.

The Quick Commerce Race – Blinkit vs the Competition

The quick commerce space in India is heating up, with several players vying for market share. Blinkit faces fierce competition from Swiggy Instamart, Zepto, and Dunzo. Blinkit currently leads with over 45% market share, processing over 1 million weekly orders.

Swiggy Instamart is close behind with a 38% share riding piggyback on Swiggy’s large user base. Dunzo and Zepto trail at 10% and 7% share, respectively. In terms of assortment, Blinkit offers over 7,000 products covering a wide range. Zepto focuses on more curated 2,000+ products, while Instamart lies in between.

Average order delivery times are neck-to-neck for all players at around 19-20 minutes. Financial resources could be a key competitive edge. Well-funded Zepto is expanding rapidly, and Instamart has Swiggy’s backing. The Zomato-Blinkit combine can match them force-for-force. Technology and innovation will differentiate the leaders going forward.

Blinkit is betting on warehouse automation, ML-based demand prediction engines, and route optimization algorithms. Customer experience enhanced by data-driven insights could decide the finishers in this race.

What does the future hold for Blinkit?

With Zomato’s backing, Blinkit aims to diversify into more product categories beyond groceries. Currently, 4% of its orders comprise non-food items. Over the next 2 years, it targets increasing this to 15% of its overall order volume. New offerings include garments, accessories, electronics, toys, cosmetics, and pharmaceuticals.

Improving Customer Retention

Blinkit intends to leverage Zomato’s over 70 million customers to accelerate growth. Special discounts and offers are being rolled out to engage and retain new users.

The average monthly order rate is targeted to increase from 2.5 per customer to over 5 in the next year. Referral programs and loyalty benefits will further aid retention.

Pursuing Profitability

Blinkit focuses more on growth and market share as a quick commerce player. Profitability is still some time away, but it is vital for its long-term sustainability.

Enhancing supply chain efficiency through investments in dark stores, improving order densities via demand aggregation, and achieving scale will help shore up its unit economics.

Final Thoughts

3 simple key learnings from Blinkit’s success

  1. It pays to adapt quickly to what users want. Blinkit showed they’re listening by shifting fast to meet the demand for speedy delivery.
  2. Joining forces multiplies success. Teaming up with Zomato gave Blinkit a boost to grow bigger.
  3. Customer-first is the way to go. Blinkit won hearts by pulling out all the stops to deliver essentials in minutes during tough times.

Focusing hard on serving people’s needs gave Blinkit a purpose that everyone roots for. Startups can stay in the game by keeping their eyes on what really makes life easier for users.