Blinkit (ex-Grofers) Success Story: What is the Zomato-owned Company Next Planning?
We tend to browse around the screens of our mobile phones far too frequently and for a variety of reasons as we advance in the modern world. We swipe our mobile devices to do things like shop, learn, relax, and satisfy an unending number of other needs.
Using our mobile devices has undoubtedly been quite beneficial; they have literally made the globe look like a place that is simple to navigate. With cell phones, our daily wants and requirements are closer than ever. We no longer need to go to the market to get our daily supplies of food, grains, and vegetables. Our cell phone with an internet connection is all we require!
When you hear the phrase “ordering daily necessities and groceries,” what is the first thing that springs to mind? Of course, you are going to order a list of fruits, veggies, and groceries, but right after that, the application or website should be the item on your list!
Currently, there are several applications, websites, and businesses where you may place orders, with Grofers/Blinkit being one of the most well-known brands. This online retailer provided us with a selection of necessities that made our lives easier.
To remain true to its tagline of delivering groceries in the blink of an eye, the unicorn of online grocery delivery supported by Softbank, Grofers, has changed its name to Blinkit. Zomato currently owns Blinkit after the food tech unicorn acquired the former on June 24, 2022, for $569 million (Rs 4,447 crore).
For more information about Blinkit, its founders and how they got the company started, its business concept, revenue model, fundraising and investors, problems, competitors, and more, read this article.
Blinkit (Grofers) – About
The on-demand online grocery delivery service Grofers, which is currently known as Blinkit and is based in Gurugram, India, was founded in 2013. Consumers can purchase a variety of daily necessities from this e-commerce start-up site, including groceries, bakery goods, infant care items, and more.
At a predetermined time, clients can order and request products through the Blinkit smartphone app, and Grofers workers will bring these items to the customers. Currently, the company operates Blinkit in over 28 Indian cities. How do Grofers fulfil orders in under ten minutes?
Grofers announced in June 2021 that it had already redesigned its delivery service and that deliveries would now be made within 10 minutes of an online order being placed. The well-known online food marketplace has guaranteed that within the next 45 days, Grofers will guarantee that orders are delivered in less than 10 minutes in locations where it operates.
People all around the country have strongly criticised Grofers for making this 10-minute delivery promise, accusing them of “exploiting” their staff to fulfil it.
Albinder Dhindsa, one of Grofers’ founders, responded to the criticism the business had received by saying,
Dhindsa noted that Grofers has partner stores within 2 kilometres of the clients, which is a huge bonus, while explaining how the company achieves its 10-minute delivery. Along with an acceptable number of partner stores in other useful cities like Mumbai, Kolkata, Bengaluru, etc., the company has more than 60 partner stores in Delhi. It has already expanded to more than 30 partner stores in Gurgaon.
Dhindsa further noted in his Twitter post that because the businesses are so closely spaced out, Grofers can easily deliver 90% of the orders within 15 minutes, even if the drivers were travelling at 10 km/h.
Additionally, Grofers’ in-store planning and administration, made possible by cutting-edge technologies, are now so well-organized that they can pack orders within 3 minutes of receiving them. Additionally, Grofers’ riders are “not incentivized to fulfil requests quickly. They carry it out at their rhythm and tempo “, Dhindsa stated.
The creator concluded by stating that Grofers has not had any recorded rider accidents and providing data from the previous two months since they began the 10-minute grocery delivery process.
As Blinkit, Grofers is now even better prepared to deliver groceries quickly. When asked why there is such a strong emphasis on speedy commerce, Albinder Dhindsa, Co-founder and CEO of Blinkit (ex-Grofers), responded that the 10-minute delivery that Blinkit offers should not only be possible but also necessary in the fast-paced life that people are currently leading. They can use the time they save for more crucial tasks.
Blinkit was acquired by Zomato and is now a Zomato subsidiary.
After several months of discussions, loans, and what-if situations, Zomato acquired Blinkit. The board of the renowned Deepinder Goyal-led food tech company ultimately approved the acquisition of Blinkit on June 24, 2022, when Zomato paid $568 million in all-stock for the online grocery delivery startup.
Blinkist’s previous $1 billion valuation took a 43 per cent hit. In the agreement, it was also reported that Zomato Hyperpure, the company’s B2B division, would buy Hands-on, Blinkit’s B2B division.
Blinkit- Founders and Team
Two IIT graduates named Albinder Dhindsa and Saurabh Kumar established Grofers.
One of the company’s founders and CEO is Albinder Dhindsa (ex- Grofers). Dhindsa received his MBA from Columbia Business School after graduating from the Indian Institute of Technology, Delhi. Dhindsa began his career as a transportation analyst at URS Corporation.
He later held associate and senior associate positions with Cambridge Systematics and UBS Investment Bank. Dhindsa next joined Zomato, where he served as the Head of International Operations for more than 2.5 years. In December 2013, he eventually left the business to co-found Grofers (now Blinkit).
Another Grofers founder was Saurabh. He was a B.Tech student at IIT Bombay studying civil engineering. At some point, he decided to pursue an MS in Transportation Engineering, which he finally earned from The University of Texas at Austin.
In addition to working with Cambridge Systematics, Saurabh also got to know Albinder there. To work as an Associate and COO for two different businesses, Opera Solutions and Rasilant Technologies Pvt Ltd., Kumar left the company.
He later joined forces with Albinder to found Grofers/Blinkit, which launched its app in December 2014. On June 18, 2021, Saurabh left Grofers. In September 2021, Kumar established Warpli, a platform for online shopping that has been called the “e-commerce of the future.” According to recent reports, Kumar’s newly established firm intends to grow quickly.
The CTO of Grofers, Jacob Singh, left the organisation and his job in July 2020. He made a significant contribution to the paid loyalty programme for Grofers’ design, rollout, and scalability. Singh, a Berkeley City College graduate who joined Grofers after working as a Country Head for Acquia, is currently a CTO in residence at Sequoia Capital.
According to sources close to the company, Blinkit promoted Rishi Arora to co-founder two months before the acquisition agreement was finalised in June 2022. Arora has remained with Blinkit for at least eight years and held the position of Senior Vice President of Operation before being promoted.
Additionally, it was mentioned that Sajal Gupta, a Zomato executive, had been recruited as the company’s CTO. According to his LinkedIn profile, Gupta was employed with Zomato for at least five years before switching to Blinkit in January 2022.
The sources claim that the company’s internal messaging system, Slack, was used to announce these promotions. In 2021, Grofers was home to about 2000 workers.
How it started: Blinkit startup story
Albinder worked as a transportation analyst for the URS Company in the USA after graduating. He met Saurabh Kumar at work and kept in touch with him without having any desire to start his own business.
Albinder and Saurabh both found that there was a sizable gap in the delivery industry. They both decided to seize the chance because many firms were starting up at the time. Retailers and customers felt the need to organise the chaotic hyperlocal space during their interactions.
They then started laying the foundation for their startup. They intended to serve as a one-stop shop for all of the clients’ local delivery needs by providing on-demand pickup and drop-off services. The purpose of this was to make it simpler for people to obtain the logistics from neighbourhood companies like grocers, pharmacies, and eateries. They both initially helped clients get their purchases delivered from nearby stores and supermarkets.
Name, tagline, and logo of Blinkit
On December 13, 2021, Grofers will have completed their attempt at rebranding under the moniker Blinkit. The company’s goal to deliver goods instantly or in the blink of an eye is in line with the choice of the new moniker Grofers.
“Let’s Blink It, or #letsblinkit is the brand’s catchphrase.
Blinkist’s previous name was Grofers, a mix of the words groceries and gophers, which specifically meant a person who runs errands. The phrase “We understand it” from Grofers was first used in an online marketing campaign.
Mission and Vision of Grofers (Blinkit)
Previously known as Grofers, Blinkit’s new mission statement is “instant commerce indistinguishable from magic.” Blinkit exclusively believes in delivering groceries to customers promptly and instantly. The current objective of Blinkit is to succeed in the fast-paced business sector.
The business model of Blinkit
Grofers, also known as the hyperLocal on-demand logistics system, operate on a marketplace business model. It intends to eliminate the necessity for customers to visit their neighbourhood stores to purchase consumer items in favour of online ordering.
There are no grocery stores or storage facilities owned by this startup.
It simply works in tandem with the city’s small food vendors to send delivery personnel to pick up the items that clients have ordered from these businesses. Online or through their mobile application, orders can be placed. This tie-up arrangement helps the local grocery store owners get more orders, while Grofers makes money from these orders by charging a charge.
Major revelations about the inventory-based business strategy are provided below:
In addition to collaborating with regional retailers and brands, logistics partners, payment processors, investors, and its acquisitions, Grofers, or Blinkit as it is now known, also does so.
Grofers engages in numerous significant activities, some of which are as follows:
- It sends out groceries
- Do warehousing
- Control the supply chain
- keeps its platform and technology current.
- Cares for shipping
- Control logistics
- Creates cutting-edge software and goods
- Services clients
- Primary Sources
Blinkit makes use of a variety of resources, such as:
- Modern technologies
- Owning intellectual property
- Modern communications and IT infrastructure
- Streamlined delivery methods
- A group of nearby retailers
- Rounds of funding
- Clientele Segments
All residents of India, including local business owners, are considered to be Grofers’ customers.
In addition to using social media and blogs, Grofers or Blinkit heavily rely on word-of-mouth advertising.
Grofers’ Business Model
The revenue model used by The Grofers is analogous to the commission-based strategy. Grofers has worked with neighbourhood shop owners and merchants to provide groceries and other daily necessities. Grofers assesses a commission to these merchants for certain orders. A commission of 8 to 15 per cent is applied to orders placed below 700, and a commission of 12 to 15 per cent is applied to purchases put below 1000. Grofers also charge a shipping fee for orders less than INR 250.
Grofers – Investors and Funding
When it comes to investors and finance, Grofers has been extremely fortunate. The entire amount of money raised by Grofers to date is close to $1 billion. On March 11, 2022, Zomato spearheaded the most recent financing round, investing $100 million into Blinkit.
The rapid commerce startup has also stated that the $100 million financing is only the first instalment of a $400 million funding round and that additional monies will be added over the following week. The food tech juggernaut substituted a $150 mn loan in its place, though.
On August 16, 2021, the beginning of the online grocery delivery business received $100 million from Zomato, the largest food delivery company in India. This enabled the leader in online grocery delivery to surpass $1 billion in valuation and enter the unicorn club.
Grover’s most recent valuation came from the August 2021 round and was $1.01 billion. The Dhindsa-led company was acquired by Zomato on June 24, 2022, and the quick commerce unicorn is looking to raise money from Zomato through a new round of funding. Zomato is the unicorn’s current investor and owner.
Revenue and Growth for Grofers
Currently, Grofers (formerly Blinkit) delivers 1.25 lakh orders every day. As of December 13, 2021, Blinkit reported processing 1 million+ orders per week across 12 cities in India. The company had hoped to be a quick commerce company that could provide consumers with all of their daily needs.
One of the biggest e-grocery companies in India, Grofers, has over 5000 products available on its website and can deliver them to customers’ homes in as little as 10 minutes. The company has experienced significant growth throughout this time.
Zomato Acquires Blinkit
Blinkit anticipated a share-for-share merger with Zomato. According to sources dated March 15, 2022, Zomato would contact the CCI to advance discussions of a merger with Blinkit. According to the merger talks, Softbank, the largest investor in Blinkit, will own 4-5 per cent of the company.
The last known valuation of Blinkit was $1 billion, and the agreement was expected to be finalised in a 10:1 ratio, which is said to value Blinkit somewhere between $700 and $800 million. When Zomato acquired the business on June 24, 2022, the Zomato board finally authorised the acquisition.
According to rumours from July 18, 2022, Blinkit is closing its warehouses and plans to meld its operations with those of the well-known food-tech firm Zomato. The majority of its warehouses, particularly the backend fulfilment warehouses, would be closed down as Zomato’s B2B restaurant supplier company Hyperpure and the Blinkit operations merged.
Blinkit took a similar measure earlier in March 2022 when it halted operations and shut down many Blinkit dark stores to adhere to its 10-minute delivery guarantee.
Blinkit’s losses have decreased month over month, according to Zomato CFO Akshant Goyal. Blinkit reported losses of Rs 204 crore in January 2022, which decreased to Rs 92.9 crore in July 2022. The main factors bringing the losses down are operating leverage and improved execution.
Additionally, the gross order value (GOV), which was previously recorded at 51 lakhs in January 2022 and 79 lakhs in May 2022, may increase to become 83 lakhs by the end of July.
The company’s revenues have increased by a commendable 78.52 per cent. The company’s operating revenue, which was previously reported as Rs 1,282.3 crore in FY19, was found to be Rs 2,289.2 crore in FY20.
From Rs 1,984.6 crore in FY19 to Rs 3,105.8 crore in FY20, Blinkit’s total expenses grew by 79.4 per cent. Accordingly, Grofers had to spend Rs 1.55 to generate just one rupee of profit during FY20.
The Albinder Dhindsa-led company’s EBITDA margin stayed nearly constant at -48.6 per cent even as its losses soared by 68.2 per cent to Rs 916.29 crore in FY20 from its earlier listed value of about Rs 702.3 crore in FY19.
The business most recently disclosed a change from being an eCommerce business focused on stocking up on inventory to being a 10-minute grocery delivery platform. The financial results of Blinkit for FY21 speak of the company’s 26.2 per cent growth, where the Blinkit revenue grew from Rs 2160 crore to Rs 2725 crore. However, it is still too early to determine the effects of this pivot.
Grofers/ Blinkit: Startup Issues and Challenges
Grofers has had significant market success in a short period, but not without its share of obstacles and setbacks. Grofers has had a lot of difficulties along the way, whether it was their delayed service or problems with the items’ quality.
In addition, it had to stop operating in important cities like Bhopal, Visakhapatnam, Kochi, and so on due to its unsatisfactory operations. Finding the right team members who would support the company’s mission and strive toward it was another one of their early problems.
Between November and February, Blinkit spent roughly Rs 600 crore to grow its business. It also offered several user discounts. However, it appears that this tactic of offering huge discounts is failing. Because of this, Blinkit is attempting to reduce its cash outflow by finding ways to save money.
With the beginning of the New Year in 2022, critics had been attacking Grofers regularly. On March 14, 2022, Blinkit fired its staff members in several significant cities, including Mumbai, Hyderabad, and Kolkata.
According to reports, this firing operation affected 5% of the company’s personnel overall. Additionally, recent reports suggest that Blinkit is delaying vendor payments.
Grofers/ Blinkit – Rivalry
It comes as no surprise that even the online grocery business has expanded significantly in India as every other e-commerce platform does so quickly. All the current players must maintain their current brands and clientele in the face of numerous large brands and supermarkets shifting their focus to online sales.
The same is true of Grofers. The following are some of Grofers’ main rivals:
- Pepper Tap
- Dunzo and more.
Although Grofers has been a favourite among investors since its start, the e-commerce business is highly competitive. Additionally, the entrance of the online food industry leader Amazon poses a serious challenge to companies like Grofers.
Future Plans for Grofers/ Blinkit
Blinkit had bragged that it had roughly 13% of the market, making it the third-largest online platform for food delivery after Bigbasket and Amazon. Bigbasket is the market leader with over 37 per cent of the total market share, followed by Amazon with 15% of the market.
Blinkit, a Zomato affiliate, aims to be the company’s online delivery leader.
Edited by Prakriti Arora