The Blinkit Business Model: How Blinkit Makes Money?

In the fast-paced world we live in today, convenience is key, and Blinkit has emerged as a prime example of how technology can revolutionize the way we shop for groceries. Blinkit, originally known as Grofers, is an Indian online grocery delivery service that has captured the attention of millions due to its quick and efficient service. But how does this company work? 

What business model drives its success? And more importantly, how does Blinkit make money? In this blog, we’ll explore these questions and more.

What is Blinkit?

Founded in December 2013 by Albinder Dhindsa and Saurabh Kumar, Blinkit is a hyperlocal online grocery delivery platform. Its primary aim is to make grocery shopping convenient by delivering a wide variety of products directly to customers’ doorsteps in as little as 10-25 minutes. The app offers everything from fruits and vegetables to bakery items, meat, snacks, and other daily essentials.

Blinkit operates in several Indian cities, leveraging its technology platform to connect customers with local grocery stores and delivery partners. The company does not own physical stores or warehouses; instead, it collaborates with local retailers to fulfill customer orders. This model allows Blinkit to deliver groceries quickly and efficiently without the need for expensive infrastructure.

The Business Model of Blinkit

The core of Blinkit’s business model is a marketplace approach, where the company acts as an intermediary between customers, local suppliers, and delivery partners. Here’s how the business model is structured:

1. Marketplace Model: Blinkit partners with local stores, supermarkets, and wholesalers who list their products on Blinkit’s platform. The company earns a commission on each sale made through its platform. This model allows Blinkit to scale quickly without the need to invest heavily in infrastructure, making it a cost-effective approach.
   
2. Inventory Management: Unlike many of its competitors, Blinkit does not keep inventory in-house. Instead, it relies on local suppliers to fulfill orders. This strategy minimizes overhead costs and helps Blinkit maintain a lean operation.
   
3. Quick Commerce (Q-Commerce): One of Blinkit’s standout features is its promise to deliver groceries in under 10 minutes. This is achieved by partnering with stores located close to customers, allowing for fast order fulfillment. Blinkit’s delivery partners pick up the orders from these stores and deliver them to customers within the promised time frame.
   
4. User Experience: The company focuses on providing an intuitive and user-friendly interface through its mobile app and website. Customers can easily browse and order products, track deliveries, and even access personalized recommendations based on their shopping history. The goal is to provide a seamless and enjoyable shopping experience.
   

How Blinkit Makes Money

Blinkit’s revenue comes from a variety of sources, each contributing to its overall financial performance.

Let’s take a closer look at the key revenue streams of Blinkit:

1. Marketplace Commission: The primary source of income for Blinkit is the commission it charges local vendors for each sale made on its platform. This commission typically ranges from 10% to 20% of the sale price, depending on the agreement between Blinkit and the vendor.
   
2. Delivery Charges: Every order placed through Blinkit is subject to a delivery fee, which typically ranges from $2 to $3 per order. While some orders qualify for free delivery based on promotional offers or subscription plans, the delivery charge is still a significant revenue stream for the company.
   
3. Subscription Fees (Blinkit Prime): Blinkit offers a subscription service called Blinkit Prime. For a fixed annual fee, Prime members enjoy several benefits, such as free delivery on orders above a certain amount, exclusive discounts, and early access to new products. This service generates recurring revenue for Blinkit and encourages customer loyalty.
   
4. Advertisement Revenue: Blinkit also monetizes its platform by selling advertising space. Brands can advertise their products on the Blinkit website, mobile app, and even on delivery vehicles. This additional revenue stream helps Blinkit tap into the growing online advertising market.
   
5. Partnerships and Promotions: Blinkit collaborates with other companies to offer special deals and promotions. For example, it has partnered with Amazon Prime to offer free delivery on certain orders. These partnerships not only drive more traffic to Blinkit’s platform but also generate additional revenue through shared marketing efforts.
   

Blinkit’s Unique Selling Proposition (USP)

What sets Blinkit apart from other online grocery delivery services? Several factors contribute to its success:

1. Speed: The most notable feature of Blinkit is its ultra-fast delivery. By ensuring that orders are delivered within 10-25 minutes, Blinkit has positioned itself as the go-to app for urgent grocery needs. Whether you’ve run out of a key ingredient for dinner or need snacks in the middle of the night, Blinkit has you covered.
   
2. Wide Range of Products: Blinkit offers a comprehensive selection of products, from fresh produce and meat to snacks, beverages, and household items. This wide variety ensures that customers can find everything they need in one place.
   
3. Convenience: Blinkit’s easy-to-use app and website make grocery shopping a hassle-free experience. Customers can place an order in minutes, track deliveries in real-time, and enjoy the convenience of doorstep delivery without stepping out of their homes.
   
4. Low Overheads: By partnering with local stores and delivery partners, Blinkit avoids the costs associated with maintaining its own warehouses or brick-and-mortar stores. This allows the company to pass on cost savings to customers while maintaining competitive pricing.
   

Blinkit’s Future and Challenges

While Blinkit has seen tremendous success, it is not without its challenges. The grocery delivery market in India is highly competitive, with several players vying for a slice of the market. Competitors such as Zopnow, Dunzo, and Zepto are also offering similar services, and Blinkit must continue to innovate to stay ahead.

Moreover, the rapid expansion of the eCommerce industry means Blinkit must continually invest in its technology, partnerships, and customer acquisition strategies. Additionally, the company’s promise of 10-minute delivery has raised concerns about the working conditions of its delivery personnel, as the pressure to meet such tight deadlines can lead to burnout and exploitation.

However, Blinkit’s focus on technology, efficiency, and customer satisfaction has positioned it well to overcome these challenges and maintain its growth trajectory. The company’s affiliation with Zomato, which acquired Blinkit in 2022 for $569 million, provides additional resources and expertise to help Blinkit expand and innovate further.

Conclusion

Blinkit has successfully tapped into the growing demand for quick and convenient grocery delivery, revolutionizing the way people shop for essentials. Through its unique business model, which leverages technology, local partnerships, and efficient logistics, Blinkit has built a strong brand and customer base.