If your mom asks you to get that bag of potatoes, we know that’s a piece of cake work for you. Also if the husband needs a quick shaving cream before that important meeting, a blink of an eye or maybe a few more, before it is being delivered to your house. In this article will let you know about the success story of Blinkit.
Why do we say that? Because we are living in the best moment on earth when technology and innovation is creating wonders to human existence. It is starting towards huge scientific breakthroughs and solving several regular issues along the way.
The smartphone might have been considered unfriendly a couple of years ago due to screens being our antagonist. But those smartphones are turning out to be extraordinary due to applications like ecommerce. We can order vegetables, medicines, electronics, and several other products just with a click.
When the COVID-19 pandemic hit the world, ecommerce platforms selling groceries played a pivotal role in our lives. In India, Blinkit, formerly called Grofers, is a very popular ecommerce company selling groceries online.
Blinkit is backed by SoftBank and the grocery company rebranded itself from Grofers. On June 24th of 2022, Zomato, the famous food delivery unicorn acquired Blinkit for about Rs. 4,447 crore or about $569 million.
Who are Blinkit/Grofers?
Grofers Online Grocery Delivery service platform was established in 2013 as an online company for delivering groceries. It is now known as Blinkit. The products offered by Blinkit are groceries, baby essentials, and many more. The mobile application of Blinkit allows the customers to schedule the delivery time of the ordered products, which is very flexible. The company operates in about 28 cities in India.
How is the 10-minute delivery possible?
Blinkit officially said that the delivery model of the company is being further developed to provide a 10-minute delivery to the customers. Although the company received huge backlash from the public citing unrealistic promises being set by the company, Blinkit assured that with data.
The company said that they have collaborated with a huge number of local stores in cities like Delhi, Bangalore, Kolkata, and many others. All these local stores are just within a 2 km radius from the customers. So it is very much innovative from Blinkit to come up with such a diverse business model.
Blinkit also said that most of these local stores are situated in a region, where orders can be delivered in the said time. The company also does not provide any sort of appreciation money for delivery agents to deliver the products to the customers by riding fast and unsafely. Data has been provided by the company to validate the facts behind the innovative business model. The ultimate motive of the 10-minute delivery is that lives are continuously running on a loop and getting access to the essentials should be hassle-free and time-efficient.
Zomato acquired Blinkit after months of discussion and board meetings. This was an all-stock deal for about $568 million and the total shares were about 33,018. The previous value of $1 billion of Blinkit was taken with a 43% haircut.
In this deal, the B2B section of Zomato, which is Zomato Hyperpure acquired the B2B part of Blinkit for about Rs. 60.7 crore.
Founders of Grofers-
The Gurugram-based grocery delivery company was formed by Albinder Dhindsa and Saurav Kumar. Albinder Dhindsa graduated from the Indian Institute of Technology from Delhi and is the co-founder of Blinkit. Albinder’s first step in his career was working at URS Corporation as a Transportation Analyst.
After this he stepped into his next role as an Associate at Cambridge Systematics and a Senior Associate at UBS Investment Bank. Albinder also worked as the Head of International Operations at Zomato for about 2.5 years. After this, Albinder Dhindsa co-founded Grofers.
Saurabh Kumar studied B.Tech in Engineering from the Indian Institute of Technology in Bombay. After that Saurabh studied MS in the field of Transportation Engineering from the University of Texas in Austin. Saurabh met Albinder at Cambridge Systematics. Saurabh left the company and played the role of COO in two other companies, namely Opera Solutions and Rasilant Technology.
Saurabh Kumar co-founded Grofers and left it in June, 2021. After this Saurabh founded an ecommerce platform named Warpli, which is set to disrupt the market with further innovative possibilities.
Apart from Albinder and Saurabh, Jacob Singh worked as a CTO of Grofers. Jacob played an important role in the design, launch along with the development strategies for Grofer’s subscription program. Jacob stepped down from his position in 2020 and is currently serving as a CTO in Sequoia Capital.
Rishi Arora was made the co-founder of Blinkit as he worked for more than 8 years in the company as the Senior Vice President of the Operations division.
The story of Grofers-
Grofers, as co-founded by Albinder and Saurabh, kept in touch and discussed the gaps in the industry of delivering products. They were interested in the hyper-local market, where the transaction between the buyer and seller was very dominant.
That was a time when startups were being formed and the market was welcoming ideas. After starting to create the foundation, Albinder and Saurabh stressed on local delivery of products to the customers. The local shops selling groceries, medicines and daily products were the most priority metrics for the business.
Business Model of Blinkit-
Grofers got itself rebranded to Blinkit on 13th December, 2021. The tagline of Blinkit expresses ‘blink of an eye’. The mission of Blinkit is 10-minute delivery of daily household products to the customers. The hyper-local delivery business model of Blinkit is a collaboration with the local shops.
The local shops accept orders through the website or the mobile application. Due to the orders and sustainable business, Blinkit gets a commission from the orders. The partners of Blinkit like the merchant, logistics, payment gateways and others work hand-in-hand to make this as seamless as possible.
Some of the main activities of Blinkiit include delivering groceries, warehouse jobs, managing the supply chain and the logistics, providing great customer service and many others. All of these are possible for the resources available to Blinkit like funding rounds, advanced IT systems, drive to innovate constantly, varied local merchants and several others.
The company does promote their services with the help of social media and the internet. Blinkit makes money from commission which is about 8% to 15% from orders that are less than Rs. 700 and about 12% to 15% from orders more than Rs. 1,000. There is also a delivery fee attached with orders that are less than Rs. 250.
Blinkit Revenue and Expense-
Blinkit/Grofers raised about $1 billion in funding that includes Zomato investing about $100 million in the month of March in 2022. Currently, Blinkit is delivering about 1.25 daily orders with about 5,000 products listed on their ecommerce platform. The stellar delivery made Blinkit, one of the largest companies in its industry.
Blinkit acquired by Zomato included SoftBank to have a stake of about 4 to 5%. In January of 2022, Blinkit witnessed losses of about Rs. 204 crores which further reduced to Rs. 92.9 crores by July in 2022. There was also an increased revenue growth of about 78.52%. In FY 2019, it was about Rs. 1,282.3 crore and in FY 2020, it was about Rs. 2,289.2 crore. The expense saw a rise of about 79.4% from Rs. 1.984.6 crore in 2019 to about Rs. 3,150.8 crore in 2020.
Although the EBITDA score was positive for Blinkit, there was a loss of about Rs. 6,126 crore reported in March of 2021. The company provided huge discounts which led to such unforeseen circumstances. Several warehouses were shut down in cities like Kochi, Bhopal, and many others due to a lack of proper customer service.
Blinkit has several competitors like BigBasket, Swiggy, Zepto, and many others. The company has about 13% market share after Amazon with 15% and BigBasket with 37%. With the Zomato acquisition, things are expected to give Blinkit an edge, with more development and scalability.
Frequently Asked Questions-
- Who founded Blinkit?
Ans: Blinkit was co-founded by Albinder Dhindsa and Saurabh Kumar in 2013.
- How much did Zomato pay to acquire Blinkit?
Ans: Zomato paid about $569 million or Rs. 4,447 crore to acquire Blinkit.
- What is the delivery time provided by Blinkit?
Ans: Blinkit delivers products within 10 minutes to its customers.