Blinkit, which until recently was known as Grofers, has temporarily suspended its services to locations where it cannot make deliveries within 10 minutes or less. Although the e-grocer has said it will resume services to all its usual locations within a month, the decision to halt services is estimated to affect 75,000 of the two lakh daily customers across 12 cities it caters to.
The radical decision comes close on the heels of a rebranding exercise, where the company reformed itself from the orange-and-white-themed Grofers to Blinkit in yellow-black-and-green motif. The idea behind this metamorphosis was to prioritise 10-minute deliveries, which it started in August this year.
The decision to stop deliveries in certain areas furthers this idea of being “insanely consistent” with the promise of making deliveries in 10 minutes.
“The Blinkit service will now be available in only the areas where we are able to arrive at our users’ location within 10 minutes (or less). We are singularly committed to instant delivery – focusing only on areas where we are serving under 10 minutes, and deprioritising everything else,” said Albinder Dhindsa, co-founder and CEO of Blinkit. “This means we will temporarily stop serving all other areas where we are not able to offer deliveries in 10 minutes.”
Dhindsa did note that the move will have a significant impact on the company’s business size, and a large number of its customers. But the temporary disruption is meant to accelerate growth as Blinkit is opening a new store every four hours, he added. The Blinkit CEO hoped that deliveries will be back to normal within four weeks from today.
"As of now a new store is being opened by our partners every 4 hours. We will continue to open more dark stores, improve our store efficiency and ensure that we are able to reach those locations that are currently unserved in 10 minutes (or less). This will be done in a phased manner," a company spokerperson told Fortune India.
The e-grocer is planning to open a dark store within a radius of 1-1.2 kilometres from the communities that it is currently not serving, the spokesperson added.
Meanwhile, industry experts believe that the focus on 10-minute deliveries, to the point of putting everything else on backburner, might be necessary to reposition Blinkit in the market which has deep-seated competitors like Amazon and BigBasket, as well as capable new challengers like JioMart.
“Online grocery is a big opportunity. While there has been a lot of noise about express delivery, players are stopping and thinking what mode they want to fight in. Choosing the right mode is crucial,” said an industry watcher, who did not want to be named, adding that the temporary suspension of services could be in preparation for paving the way ahead. “They [Blinkit] seem to have come to a conclusion that they want to set up dark warehouses to meet the 10-minute delivery target. They want to get their unit metrics, fill rate and demand right.”
On the ambitious objective of 10-minute delivery, the expert said it is a difficult one, but not impossible. “They can definitely achieve it, but they will need to have the unit economics as well as the fill rate. The maths has to stack up.”
Another expert opined that this could be part of the ongoing process where companies periodically take decisions related to serviceability of a particular PIN code.
“There could be internal or external reasons behind this. Internal reasons may include inability to service the location due to resource optimisations and such. External reasons feature high velocity of cancellations or customers refusing to accept deliveries. As of now the reasons appear to be more internal than external,” said Ankur Bisen, senior partner and head - retail, consumer products and food at Technopak.