In India, instant delivery services have become a synonym for “comfort & convenience.” Nowadays you get almost everything i.e., from groceries to fast food at your doorstep, and that too within a few minutes. And one such grocery delivery service that’s ruling the Indian market is “Blinkit.” Launched in December 2013, it has become a part of our lifestyle (especially in metro cities). Do you know, its market valuation is Rs.1,440 crore? Not only that but also it earned a massive revenue of Rs.2,616 crore. But how does Blinkit make money? How did it become so successful? You will get to the business model of Blinkit in this article along with its major revenue sources.
Blinkit: A Brief Overview
Till the last decade, there was a wide gap in the delivery industry. The founders felt the need to sort out the unexplored space between merchants and consumers. That’s how the idea of an on-demand local delivery service emerged and Blinkit was formed. But previously, it was known as “Grofers.” Later, it changed its name to “Blinkit.”
Let’s have a brief overview of the company
|Type of Company||Instant Delivery Service for groceries|
|Founders||Albinder Dhindsa, Saurabh Kumar|
|Headquarters||Gurugram (Haryana, India)|
|Tagline||“Let’s Blink it.”|
|Operating Space||B2C (Business-to-Customer)|
|Market Valuation (FY22)||Rs.4,447 crore|
|Revenue (FY22)||Rs.2,616 crore|
|Expenses (FY22)||Rs.4,072 crore|
|Net Profit/Loss (FY22)||Loss of Rs.1,440 crore|
The three key parts of the Blinkit business model are-
- Working Strategy
- Revenue Sources
- Marketing Strategies
Working Strategy: How does Blinkit work?
Blinkit states that its mission is to provide “instant commerce indistinguishable from magic.” Below, you will get a complete breakdown of the working strategy of Blinkit.
1. Partnerships with local merchants
Blinkit partners with local merchants and supermarkets to offer a wide range of products to customers. By partnering with local merchants, it is able to source products directly from the source. This process eliminates the need for intermediaries and thus, reduces costs. Don’t you wonder that it is similar to backstabbing the local merchants and vendors? It may sound like that but it’s not! Blinkit significantly helps to support local businesses and promote economic growth in the communities where it operates.
2. Dark Stores: Logistics and Inventory
The next key working strategy of Blinkit is its logistics and inventory system meaning “Dark Stores.” Blinkit doesn’t own any shop. Then does it purchase the goods from shops and deliver them to you? Not exactly! Blinkit purchases groceries and other essential items in bulk from wholesale merchants and stores them in dark stores. So, you can call a “Dark Store” a micro-fulfillment center for online orders.
(Note: We have covered the concept of the dark store in the Zepto business model.)
A dark store is a retail distribution warehouse from where goods are taken out for delivery. But wait! You can’t just walk into any dark store and purchase the groceries directly (offline). To make a grocery purchase, you will have to order the goods on Blinkit’s app. Thereafter, the delivery agent collects your order from the dark store and delivers it to your doorstep. But how does it deliver the commodities so quickly? You will find out in the next section.
3. 10-minutes Delivery
Do you know, that dark stores are the lifeline of quick commerce platforms, especially for Blinkit? It can deliver the orders within 10-20 minutes because its dark stores are situated within a close radius of the customers. For quick delivery, the dark stores should be densely present in the city i.e. in every corner of the sector. Do you know, how many dark stores are available in the Delhi NCR? Over 200 dark stores! Quite strategic. Isn’t it? Blinkit has over 400 dark stores all over the country. Thus, you can say that- the nearer the dark store, more quick the delivery!
4. Efficient Usage of Technology
Blinkit leverages technology to streamline its operations and optimize its supply chain. Also, it invests in technology to improve its app and website, enhance the user experience, and increase efficiency in operations. The company uses data analytics, machine learning, and artificial intelligence to forecast demand, manage inventory, and optimize delivery routes. This helps Blinkit to reduce costs, improve efficiency, and provide a seamless customer experience.
5. Investment in Marketing
Blinkit engages in various marketing and promotional activities to attract new customers and retain existing ones. It offers discounts, cashback, and other incentives to customers to increase sales. We will dig it up in the section on “Marketing Strategies.”
6. Acquisition by Zomato
In June 2022, Zomato acquired Blinkit by coughing a whopping amount of Rs.4447 crore. Zomato works in the food delivery market but it wanted to expand its arms in the quick commerce market too! Because the grocery market is much larger than the food delivery market. It could do it by either of the two ways. First, by introducing a new service related to quick commerce. Or second, to acquire one that was already doing well in that field. Zomato chose the second option and acquired Blinkit successfully.
How does Blinkit make money? This is the most sought query of the folks. Blinkit earns money through its diverse revenue sources. Some of the major ones are-
1. Commission-based Revenue Model
This is the primary source of revenue for Blinkit. As you know, it partners with local grocery stores as well as wholesalers who list their products on its platform. For this, Blinkit charges a commission which is typically a percentage of the sale price.
|Commission Percentage||Type of Order|
|Upto 8%||For orders less than Rs.250|
|8% -12%||For orders less than Rs.700|
|12% – 15%||For orders less than Rs.1000|
Thus, the profit margin varies depending on the product category/merchant/locality. In short, Blinkit earns revenue by taking a percentage of the total revenue generated.
2. Delivery Fees
How does Blinkit make money through delivery fees? Do you know, Blinkit delivers over 1.25 lakh orders per day? Also, it operates in more than 30 cities in India. Blinkit has its own fleet of delivery personnel who pick up orders from local merchants and supermarkets and deliver them to customers’ doorsteps. The company charges a delivery fee for this service, which varies depending on the order value and the delivery location.
3. Subscription-based Loyalty Program
Blinkit offers a loyalty program called the “Smart Bachat Club.” It provides customers with additional discounts and benefits for a monthly fee. This program generates recurring revenue for the company and incentivizes customers to make more purchases on its platform. This program worked as a marketing campaign during the Covid-19 pandemic.
4. Advertising Revenue
If you observe the categories of groceries or personal care items in Blinkit, then you will see numerous recommendations. These recommendations are a part of the advertisement. Blinkit generates advertising revenue by allowing brands to advertise on its platform. How does Blinkit make money through advertisement? Brands can pay to have their products featured prominently on the Blinkit app or website, or they can sponsor promotional campaigns to reach a wider audience.
Blinkit has used a variety of marketing strategies to build brand awareness and attract customers. Here are some of the key marketing strategies of Blinkit-
1. Outdoor Ad Campaign
This is one of the most powerful ways to catch the attention of viewers. When you advertise the products on billboards with interesting captions, you easily grab the attention of the public. In a series of ads, Blinkit used lyrics from popular Bollywood songs and tweaked them. For example-
- “Anda yeh bindaas hai, anda yeh bindaas hai”- for Eggs
- “Basanti Naaaach-os”- for Cornitos
- “Apna lime aayega”- for Lemons
- “Chakna mereya mereya”- for Lays
- “Mere paas upmaa hai”- for MTR
The billboards also represented the collaboration of Blinkit and Zomato. Consequently, it became the first viral trend of the year 2023.
2. Television and YouTube Advertisements
You might have seen various video ads of Blinkit with the tagline “Needed in 10 minutes, just Blinkit.” These ad campaigns target customers who don’t have time or wish to go shopping but still want to purchase commodities. They create advertisements from pop culture.
Blinkit offers alluring to attract customers and encourage them to make purchases on its platform. The company frequently offers discounts and cashback offers on specific products, as well as for first-time and repeat customers. This helps to increase and retain the customer base.
4. Partnerships & Collaborations
Blinkit has partnered with several brands and organizations to promote its services and expand its reach. For example-
i) Paytm: Blinkit has partnered with Paytm, India’s leading digital wallet, to offer cashback offers to Paytm users who make purchases on Blinkit’s platform.
ii) Netflix: Blinkit has partnered with Netflix to promote its popcorn with binge-watching. It tweeted “Binge watch karoge, Popcorn hum la denge.”
Note: Recently, Blinkit was in the news headlines due to their delivery workers’ strike. We have covered the whole news in the article “Delivery workers’ strike against Blinkit in Delhi NCR.” You can visit it to have detailed information.
Blinkit is an Indian online grocery delivery service that operates under Zomato (parent company). It provides a wide range of products (groceries & personal care items) to customers in major cities across the country. It operates on an effective and well-proven business model, connecting customers with local merchants and supermarkets through its online platform. So, we hope that you understood “How does Blinkit make money”, “How does it work”, “How does it reach its target audience”, etc. Its business model is similar to Zepto. We have also explained Blinkit vs Zepto. Thus, with an efficient business model, Blinkit has become a part of our daily life!