Blinkit - Online Delivery Platform

Formerly known as Grofers, Blinkit is a unicorn offering 10 minute instant delivery of groceries and essentials in India.

Feb 09, 2022

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Snapshot

Founded in 2013, Gurgaon-headquartered Blinkit is an online grocery delivery platform that has 21 categories and over 120,000 products. It provides 10 minutes express delivery to its customers and offers products at a discounted rate making it cheaper than other online stores.

Blinkit operates in 12 cities currently but aims to expand to 100 cities by the end of March 2022. The company has a number of key partnerships with notable brands like Opinio, Grab a Grub Services, Happy, Yes Bank, and more. It has raised funding from major investors like Sequoia Capital, SoftBank Capital, SoftBank Vision Fund, Grofers International, Abu Dhabi Capital Group, BCCL, Tiger Global Management, Yuri Milner, KTB Ventures, Tiger Global, and Sequoia Capital India.

In 2021, the company became India’s 24th unicorn after receiving an investment of $120M from Zomato as well as existing investor Tiger Global Management bringing its total valuation to over $1B. The company’s last funding round was in September 2021 where it raised $16.7M from its existing investor KTB Ventures in a Series G funding round.

About Blinkit: Website, Linkedin

Business Overview & Products

Blinkit operates as an online grocery shopping platform with super-fast delivery services and the lowest rates on groceries. It currently has 21 categories:

It also has its own 8 in-house brands: Blinkit Happy Day, Blinkit Happy Home, Blinkit Mothers choice, Blinkit Happy Baby, G Fresh, O’range, One number, and budget brands like Savemore.

The company previously used to operate in more than 40 cities in India but has temporarily halted operations in cities where their instant delivery system isn’t available. Currently, Blinkit is running successfully in 12 cities.

How It Works

Blinkit has dark stores where it stores products procured from various brands and local businesses. These dark stores store approximately 3,000-4,000 stock-keeping units. This way the company delivers at a more consistent rate by being in charge of the entire delivery process from procurement to storage. The products purchased from regional brands as well as local manufacturers go into the inventory for further action. The company has also introduced private label brands, partly taking over the production step in their supply chain.

Blinkit has QR Code tracking for their products to monitor every aspect from the number of items to their expiration date. To place an order, the customer can either use the Android or IOS app or opt for the company’s website. Once the order is placed, employees in the dark stores locate, check, pack and prepare items for delivery. The delivery executive then picks it up from the dark store and follows the direction on their smart device to then deliver the order to the customer.

Blinkit’s partner stores are situated within 2 kilometers of the customers which makes express delivery easy. These stores are so densely located that 90% of the orders can be delivered within 10 minutes even if the drivers drive at 10km/hr. The packing process is also time-efficient because of in-store planning and management with the help of advanced technologies. This results in employees being able to pack orders within 3 minutes of receiving them.

Business Model & Pricing

In the beginning, Blinkit had a marketplace business model, which is also referred to as a hyper-local on-demand logistics system. The startup did not own any dark stores or warehouses so all the products came from local stores. It generated revenue from the commission it charged merchants and local stores for orders placed through the app. However, it suffered a massive loss due to this business model as local stores were unreliable and their quality was not up to standard.

Hence, Blinkit switched to an inventory-based model in 2017, where all the products would be stored in warehouses owned by Blinkit so it could be in charge of the entire process from procurement, storage to delivery. Since the company started buying products in bulk, it was able to save money and offer products at cheaper prices to its users. It also invested in original labels which now account for 20% of their total revenue. The company is a quick commerce brand now and prides itself on delivering essentials within 10 minutes of ordering.

The startup has multiple revenue streams from the sale of groceries to advertisements as well as commission. It charges commissions based on the price of orders. For instance, if the orders are below 700, it charges a commission of 8% to 15% and if the orders are below 1000 ($13.40), then 12% to 15%. It also charges a delivery fee starting from INR 49 ($0.66) for orders that are below INR 250 ($3.35).

Traction

In 2021, Blinkit’s GMV run rate was $600M with 4 million orders a month. In 2020, the company turned operationally profitable after experiencing a huge rise in sales during the coronavirus pandemic as people saw online shopping as the safer option during those uncertain times. As a result, Blinkit acquired 2.6 million new customers and saw a significant hike of 64% in first-time online grocery shoppers. It also saw a 78.52% growth in revenue from $172M in 2019 to $307M in 2020. Around 92.8% of revenue came from the sale of groceries, which amounted to $285M, while commission income and advertising revenue stood at $13M and $8M respectively.

In December 2021, the company rebranded itself as a quick commerce brand and made an announcement about the closure of all its locations where 10 minutes delivery service isn’t available. Blinkit claimed that its 10-minute delivery service had already resulted in over a million orders a week and a 3 million monthly order run rate. Moreover, Blinkit also boasted about opening 200 dark stores in the last three months as well as gaining one million quick commerce users in a short span of time.

The company offers express delivery to 12 cities and hopes to decrease the 10-minute delivery time in the future. It raised $120M in Series G funding round by Zomato and is now India’s 24th unicorn.

The company was recognized as one of the top 10 startups in Delhi by YourStory.com. It also won the “Comeback Kid” award in ET Startup Awards and IndianWeb2 listed it amongst the top 10 promising Gurgaon-based startups.

Founder(s)

Albinder Dhindsa: Founder and CEO of Blinkit. Albinder, an IITian started his career as a transportation analyst at URS Corporation. After working for a consultancy firm as a Senior Associate, he decided to quit his job and pursue masters in the USA. Once he returned to India, he joined Zomato as Head of International Operations and that job piqued his interest in the fast-growing potential of the startup industry.

Saurabh Kumar: Founder and former COO of Blinkit. Saurabh, a fellow IITian, also worked at the same consultancy firm as Albinder. He then served as the Chief Operating Officer of Rasilant Technologies prior to co-founding Blinkit. After 8 years of building Blinkit however, Saurabh decided to call it quits and step down from his role as COO in 2021. Now he serves as a board member and shareholder of the company.

History and Evolution

In 2013, Kumar started Onenumber, a B2B provider of a supply chain platform. The aim was to help larger brands distribute consumables to smaller merchants, and for those smaller merchants, who are almost completely offline, to better keep track of their stock. However, after interacting with merchants, he realized the struggle they faced with delivery logistics.
In December 2013, Onenumber was rebranded as Grofers, a hyperlocal delivery service focused on pharmacies and Kirana shops, while Albiner Dhindsa hopped on board as the co-founder.
In 2014, the company started delivering grocery and FMCG goods for businesses in Gurugram with four delivery boys. It started gaining traction quickly because of its 90-minute delivery service which gave it an edge over its competitors. That year the company launched its first mobile application.
In 2015, Grofers grew to 200 on-field delivery people and 40+ employees in tech, operations, and marketing units.
In 2016, the startup suffered a loss of $30M after spending a huge amount on rapid expansion activity and customer acquisitions. The high cash burn led to Grofers’ closing its operations in nine cities citing that business was not viable. It also laid off about 100 employees as part of a massive restructuring.
In 2017, Grofers changed its business model to an inventory-based model. As a result, it grew 4x from last year. The company ended the year at a revenue annual run rate of $134M and saw a significant hike in sales.
In 2018, the company grew at a monthly rate of 15% across the cities. That year Grofers also started a subscription-based service, Smart Bachat Club, and entered the packaged milk category with a new brand, G-Fresh.
In 2019, Grofers expanded its operations to 27 cities as part of its expansion plan and witnessed a 56% hike in its revenue growth.
In 2020, during the pandemic, Grofers saw a two-fold growth in sales and the value of orders. There was a 75% growth in business, a 45% growth in the number of orders, and an 18% growth in order value. It also switched to 24-hours service to cater to the growing needs of consumers during the pandemic. The company finally achieved profitability at the end of the year as well.
In 2021, Grofers introduced express delivery in 12 cities by claiming to deliver orders within 10 minutes. It received a lot of criticism from consumers for putting its drivers at risk with this new strategy. The company also expanded into new categories like apparel, home decor, books, toys, and more. Moreover, Grofers’ co-founder Kumar decided to exit the company to start his own venture.
By the end of 2021, Grofers rebranded itself as Blinkit to reflect its pivot from scheduled grocery deliveries to a quick commerce brand. The company now focuses on delivering everyday essentials within 10 minutes in several cities of India and has set up more than 200 dark stores for this purpose. It has also announced the temporary closure of all its locations where their 10-minute delivery system isn’t available.

Additional Learnings

Blinkit has come to identify its sweet spot – the middle and lower-middle-income group, whom Dhindsa calls the ‘motorcycle families’. These groups actively look for discounts and are intrigued by low prices. This is why the company’s way of serving consumers is about offering attractive price points through its in-house brands. Consequently, it has lined up an array of private brands which fetch higher margins than third-party brands. Moreover, the company also offers 10 minutes express delivery which is a concept not many online delivery platforms have been able to master in India. This quick commerce model makes them stand out from the majority of their competitors and makes them the go-to place for customers looking for instant delivery of products.

Market Snapshot:

Due to an increase in digital adoption during the pandemic, the Indian eCommerce market has witnessed tremendous growth. India’s eCommerce market is now the 8th largest in the world with a revenue of $50B in 2020 which places it ahead of Canada and right behind France.
In 2021, the market was estimated to be worth over $55B in Gross Merchandise Value.
Groceries make up for 66.5% of the total retail spending in India, which translated into a $600 billion+ market in 2019.
According to RedSeer Consulting, the online groceries segment has grown by about 75 percent in the lockdown period during the pandemic alone. The market is estimated to see a $200 billion increase by 2024 driven by new segments and accounting for India’s over 100 million online shoppers.

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