How BlinkIt is WINNING India’s ₹23,000 Crore Quick Commerce Industry | GrowthX Wireframe

Summary

Blinkit, a quick commerce giant in India, has disrupted the market with a valuation of $13 million and 46% market share. It has tripled its revenue to 2300 CR rupees, expecting to break even by 2025. The company's success lies in its dark stores strategy, efficient delivery, and high average order value. With a strong brand and potential Zomato integration, Blinkit is poised to continue leading the quick commerce industry.

Takeaways

• 📈 Blinkit has surpassed Zomato in valuation and is now valued at roughly $13 million with a 46% market share in India's 23,000 CR quick commerce industry.
• 💰 Blinkit's revenue has tripled from 800 CR to 2300 CR and is expected to break even in the first quarter of FY 2025.
• 🛒 The average order value for Blinkit is approximately 600 rupees, which is close to the typical order value for most customers.
• 🏪 Blinkit earns revenue from three main sources: warehousing services and marketplace commissions, ads shown on the app, and customer fees including delivery and packaging.
• 📊 The take rate for Blinkit, which is the share kept from an order, is roughly 110 rupees out of an average order of 600 rupees.
• 🚚 The cost side for Blinkit includes last-mile delivery costs, dark store mid-mile and warehousing costs, variable costs like packaging and payment charges, and customer acquisition costs.
• 💡 Blinkit's contributing profit, which considers only variable expenses, is approximately 15 rupees from each transaction, but this is not the net profit as it excludes fixed expenses.
• 🔑 The scale insight for Blinkit involves reaching more customers and scaling revenue through the use of dark stores, which are strategically located to ensure quick delivery.
• 🏬 Dark stores are large, inventory-rich facilities that serve as quick delivery points and are significantly more efficient in terms of gross merchandise value per square foot than traditional supermarkets.
• 📊 Blinkit has the highest average order value compared to competitors, which contributes to a higher contribution margin and is a key strategy for the company's growth.
• 📈 Blinkit's market share has increased from 32% in 2022, and with Zomato's acquisition, there is potential for significant growth in new customer acquisition through Zomato's large user base.

Q & A

What is Blinkit and why is it in the news?

Blinkit is a quick commerce company that has recently gained significant attention for its rapid growth and valuation, surpassing that of Zomato. It has reported over 2,300 CR rupees in revenue and has disrupted India's quick commerce industry with a market share of 46%.

How did Blinkit increase its revenue from 800 CR to 2300 CR?

Blinkit managed to triple its revenue by expanding its market presence, optimizing its operations, and leveraging its quick delivery model which caters to the demand for instant gratification in the consumer market.

What is the average revenue Blinkit earns per order?

On an average order of 600 rupees, Blinkit earns roughly 110 rupees, known as the take rate, which is the share Blinkit keeps for itself from each order.

What are the main sources of revenue for Blinkit from each order?

The main sources of revenue for Blinkit from each order include warehousing services and marketplace commissions from suppliers, ads shown by brands on the platform, and customer fees which cover delivery and other service charges.

What is the concept of dark stores in the context of Blinkit's business model?

Dark stores are large, warehouse-like facilities that Blinkit uses for storing and preparing orders. They are strategically located in close proximity to customers to ensure quick delivery within a 15 to 20-minute window. These stores do not have walk-ins and are exclusively for the use of delivery riders.

How does Blinkit's average order value (AOV) compare to its competitors?

Blinkit has the highest average order value among its competitors, at about 635 rupees, which is significantly higher than other platforms like Big Basket, Zepto, and Instamart.

What is the significance of the average order value in quick commerce?

A higher average order value is significant in quick commerce because it directly impacts the contribution margin for the company. A larger AOV means more profit per delivery, making the business model more sustainable and profitable.

How does Blinkit's business model differ from a traditional supermarket?

Unlike traditional supermarkets, Blinkit's dark stores do not cater to walk-in customers. They focus solely on fulfilling online orders quickly, with a high inventory turnover and optimized operations for delivery efficiency.

What is the role of Zomato in Blinkit's growth?

Zomato, which acquired Blinkit in 2022, has played a crucial role in its growth by providing access to a large user base and integrating Blinkit services within its app. This has allowed Blinkit to tap into Zomato's extensive customer base and potentially increase its market share.

What strategies has Blinkit employed to increase its market share?

Blinkit has employed strategies such as increasing the number of dark stores, enhancing its SKU strategy to offer a wide variety of products, and creating buzz through bold initiatives like delivering high-demand items like iPhones or PS5s within minutes.

How does Blinkit's positioning as a one-stop marketplace contribute to its success?

Blinkit's positioning as a one-stop marketplace allows it to capture a larger share of the consumer's wallet by offering a diverse range of products and services, which in turn increases customer retention and average order value.