Blinkit targets 2,000 dark stores by 2026 end while profitable: CEO
Zomato-owned quick commerce firm Blinkit is planning to keep up its expansion spree at the cost of lower short-term margins. It aims to increase its dark store count to 2,000 by the end of 2026, from 639 currently, said Blinkit CEO Albinder Dhindsa.
“As of now, we see a line of sight of getting to about 2,000 stores for our current business. Most of these stores would be in the top 10 cities in India. Beyond the large cities, the size of the market is still undiscovered. How fast we are able to get to this store count will depend on how well we execute,” Dhindsa said in a letter to shareholders while announcing Zomato’s June quarter results.
The company has been expanding its dark store network at a rapid pace over the last few quarters. Blinkit added as many as 113 stores in the first quarter (Q1) of financial year 2024-25 (FY25) alone, up from 526 in the previous quarter.
“Speed of execution also comes at the cost of lower short-term margins, which we are okay with…If everything goes as planned, we plan to get to 2,000 stores, latest by the end of 2026 while remaining profitable,” Dhindsa added.
In Zomato’s June quarter results, Blinkit outpaced the company’s core food delivery business both in terms of adjusted revenue as well as gross order value (GOV) growth. The quick commerce vertical’s GOV and revenue grew at over 22 per cent quarter-on-quarter (Q-o-Q) versus food delivery, which grew at over 10 per cent across both metrics.
The company’s GOV in the June quarter stood at Rs 4,923 crore, up from Rs 4,027 crore a quarter ago.
According to Dhindsa, Blinkit’s GOV per store has grown from about Rs 6 lakh per day per store when it was at 383 stores a year ago to about Rs 10 lakh today when it is at 639 stores.
“For our top 50 stores today, this number is Rs 18 lakh per day per store, and growing. We believe that most of our stores today are under-utilised from a capacity standpoint and hence GOV per day per store should continue increasing from here even as we aggressively scale store count,” he said.
Blinkit’s GOV growth, Dhindsa added, has primarily been driven by incremental growth in consumption, a shift among consumers from next-day delivery via e-commerce to quick commerce, and a shift from mid-size and large-sized organised retail within the large cities.
The average order value (AOV) on the platform has also been on a steady increase, aided by the category expansion of products like electronics, beauty and make-up, pet care, and toys and games.
Blinkit’s AOV stood at Rs 625 in the June quarter, up from Rs 617 in Q4 FY24, and average monthly transacting users went from 6.4 million to 7.6 million during the same period.
“We have been focused from the beginning on increasing the selection for our customers and offering it in the most efficient way to them. This has meant that the average selection available to customers in any neighbourhood has increased between 4-5x over the last eight quarters – we are now able to offer up to 25,000 unique SKUs to our customers in some locations,” Dhindsa said.
Management at the firm is of the view that the increasing competition in the space – Mumbai-based Zepto recently raised $665 million and Flipkart has announced a foray into quick commerce – is not likely to affect Blinkit’s operations.
“Recently, some (quick commerce) players have been spending more on marketing and subsidies. However, our customers, who value quality of service and reliability, seem to be unaffected, and that reflects in our performance of the quarter, where we have grown over 20 per cent without the need to match the spends or subsidies of our competitors,” Dhindsa said.
First Published: Aug 01 2024 | 6:59 PM IST