The Rise of Blinket and Quick Commerce in India

Introduction

• Blinket, Zepto, and Instamart are significantly impacting Amazon and Flipkart
• Potential for Blinket to surpass Amazon in India within the next 10 years
• Zomato-owned Blinket showing rapid growth

Challenges and Evolution of Quick Commerce

• Quick Commerce initially faced several challenges (unit economics, customer acquisition costs, profitability)
• In 2022, the average order value (AOV) was low, leading to difficulties in profitability
• High fixed costs and delivery costs were major challenges

Turning Point for Quick Commerce

• A two-month-old LinkedIn post indicated that Blinket's sales for Bombay Shaving Company outpaced Amazon's
• Blinket's growing AOV shows the transformation in the industry
• Challenges from 2022: average order value, gross margins, and delivery costs

Business Strategy

• Increase in AOV from 400 to 550 rupees transformed financial viability
• Example: Increasing AOV from 400 to 550 rupees changes the unit economics favorably
• Importance of achieving economies of scale

Key Metrics and Economics

• Gross margin and net margin are different - gross margin includes direct costs minus revenue
• AOV for Blinket now 635 rupees
• Contribution margin and net margin calculations explained
• Fixed vs. variable costs explained

Three Market Segments in India

• India 1: 30 million high-income households ($155,000 per year)
• India 2: 300 million moderate-income individuals ($3,000 per year)
• India 3: 1 billion low-income individuals ($1,000 per person)
• India 1 has disproportional consumption compared to India 2 and India 3 combined
• Strategies based on specific market segments: cost, convenience, catalog

Consumer Behavior and Business Strategies

• Different consumer behaviors across India 1, 2, and 3
• India 1 focuses on convenience and is less price-sensitive
• Example of streaming services for different segments

Blinket's Strategic Moves

• Charging delivery and high-demand fees
• Pricing products at a premium for faster delivery
• Expanding product catalog from groceries to electronics and more
• Improvement in daily order processing per dark store from 600 to 1,400

Future Outlook and Opportunities

• As contribution margins rise, Blinket approaches net profitability
• The importance of data collection and its utilization in e-commerce
• Comparison with Zomato's data advantage and strategic placements

Lessons and Recommendations

• Lesson 1: Consider premium platforms (Blinket, Instamart, Zepto) for new brands
• Lesson 2: Develop theses for investments regularly
• Data Utilization: Leverage customer data for competitive advantage
• Quick Commerce: Looks poised to dominate with unique consumer insights
• Competitive landscape to watch: Blinket, Swiggy, Zepto vs. Amazon, Flipkart

Conclusion

• Blinket's rise and Quick Commerce's potential for rapid growth
• Future case studies and continuous evolution