'Not taking share from D-Mart', says Blinkit CEO
Blinkit CEO clarified that the company is not competing directly with value-focused retailers like D-Mart.
Blinkit CEO Albinder Dhindsa clarified the quick commerce platform's market position during Zomato's earnings report, emphasizing that the company is not competing directly with value-focused retailers like D-Mart.
Why it matters: This statement sheds light on Blinkit's business model and target market from management perspective, offering guidance on the impact of quick commerce on traditional retail formats.
Context: As Blinkit and Zepto scale rapidly in India's competitive retail landscape, questions have arisen about how large the total addressable market might be for quick commerce.
State of play: Dhindsa identifies three main sources of Blinkit's Gross Order Value (GOV):
- Incremental growth in consumption: Blinkit is creating new demand by making hard-to-access products more available. For example, nearly two-thirds of their ice cream sales are believed to be incremental.
- Share shift from next-day e-commerce: Quick commerce is attracting customers who previously relied on traditional e-commerce for non-grocery items.
- Share shift from mid-premium range modern retail in large cities: Blinkit is competing with organized retail outlets that offer wide assortments and premium daily-use items.
"We know that we are not taking share away from kiranas, or from value-focused large retail players like DMart," Dhindsa stated. He added that Blinkit cannot replicate the value-focused items available in these formats, especially in price-sensitive categories like staples.
Worth noting:
- Blinkit has invested in one of the largest frozen supply chains in the country to support categories like ice cream.
- The company is seeing rapid growth for online-first brands like Perfora in the oral care space.
Caveat: While Blinkit is not directly competing with value retailers, it is reshaping consumer behavior in certain segments, particularly in large cities and for premium products.
The big picture: Blinkit's growth strategy focuses on creating new demand, improving convenience, and offering a wide selection of brands, rather than directly competing with established value retailers.
Read more about management's comments here.
