The Rapid Expansion of Blinkit: A Double-Edged Sword in India’s Quick-Commerce Arena
Zomato’s quick-commerce venture, Blinkit, is on a fast track to dominate the instant delivery sector in India. While its expansion is impressive, the company anticipates accumulating more losses as competition heats up. Blinkit has set an ambitious target to establish up to 2,000 dark stores—ahead of its initial schedule—by next year. These dark stores are essentially small warehouses strategically located in residential areas, exclusively servicing online orders.
By the end of December, Blinkit surpassed its own projections by setting up over 1,000 stores. In just the last two quarters, the company added 368 new stores and expanded its warehousing space by 1.3 million square feet. However, this rapid growth came with a cost, leading to losses amounting to ₹1.03 billion ($11.9 million) in the third quarter of the current fiscal year.
A Fierce Competitive Landscape
According to JPMorgan, India’s quick-commerce sector has entered a “land grab mode.” Companies are aggressively expanding their store networks and offering attractive product discounts and loyalty programs to capture market share. Notably, Zepto, a key player in this field, is also ramping up its dark store infrastructure ahead of schedule.
“As we continue to bring forward store expansion, our networks may have to carry a greater load of under-utilized stores, which will impact near-term profits in the next one or two quarters,” said Akshant Goyal, Zomato’s chief financial officer.
— Akshant Goyal
- Zepto: Backed by Lightspeed, StrepStone and Glade Brook with over $1 billion raised last year.
- Flipkart: Launched a quick-commerce service with more than 100 dark stores.
- Amazon: Initiated a pilot for its own quick-commerce service in India last month.
- Swiggy: Went public late last year as India’s No.3 quick-commerce platform.
The Impact on Traditional E-Commerce
The rise of quick-commerce firms like Blinkit is reshaping India’s e-commerce landscape. These companies promise delivery of groceries, household items, beauty products, and now even electronics like smartphones and laptops within mere minutes. This swift service has forced traditional e-commerce businesses to re-evaluate their supply chains to keep pace with changing consumer expectations.
“The biggest impact of the intensifying competition has been the acceleration in customer awareness and adoption of quick commerce,” said Albinder Dhindsa, who leads Blinkit.
— Albinder Dhindsa
A Look Ahead: Strategic Investments and Future Growth
Blinkit acknowledges that while competitive pressures are impacting margins, their current investment in expanding store networks is expected to pay off with significant returns once they achieve larger scale. Despite slowing growth in Zomato’s core food delivery division—up only 17% in the third quarter—quick commerce witnessed an impressive growth spurt of 120%.
The strategic shift towards aggressive expansion amid fierce competition highlights both opportunities and challenges for Blinkit as it navigates this rapidly evolving market landscape.
