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How does Blinkit Earn Money? A Step-by-Step Guide

As the name suggests, Blinkit is an Indian m-commerce marketplace that works exceptionally well in quick online grocery delivery. It’s a dream come true for everyone who doesn’t find time to go out and shop for daily essentials.

As of January 2022, the company is valued at $1 billion. This wouldn’t have been possible if not for the people who wholeheartedly welcome this new alternative.

Now, focusing on the triumph of this succeeding business is one thing, knowing how Blinkit earns money is a different aspect. Especially, if you’re looking to enter this rapidly growing online grocery market, this is the question you would want to know an answer to. At the end of the day, it’s only a business where you are providing a better alternative to the customers and making money off of it.

This blog will provide you with a thorough insight into how Blinkit is turning this opportunity into gold. It also offers an outlook on their business model and other essential aspects of their revenue generation.

What is Blinkit?

Now an established name in the online grocery delivery industry, Blinkit started as a startup that allows you to select groceries from your favorite local store. From fruits, vegetables, and bakery products to pet essentials, baby care, and cosmetic products, get everything delivered in a 10 – 90 minutes timeline. Even if you want your daily essentials at a later time or date, you can simply schedule your delivery as per your convenience.

How is Blinkit doing so well?

Well, in a way, this wouldn’t have been possible if not for the succession of e-commerce players like Amazon, eBay, Walmart, etc. They have been successful in gradually breaking the norm of conventional shopping and setting up a habit of e-consumerism. Above all, they have created a market in other aspects of e-consumerism, whether it is an on-demand ride-sharing business or food delivery startup.

If you follow the trend in the last decade, every business wants to go online. This is because of the huge number of people moving online for, literally, anything and everything! One big reason for such an ongoing shift is people and their long working hours! As per a survey from Global Issues Barometer, over 35% of consumers in India are facing financial degradation. This leads people to work for long hours in the offices to make the ends meet. As a result, it gets way harder for them to make time for doing daily chores, like buying groceries, especially in urban cities.   

With the world moving online, it makes sense that entrepreneurs are making the most of this opportunity and coming up with better alternatives to make our life an easy affair.

Blinkit Business Model

Established in 2013, Blinkit was initially started by the name of Grofers – an on-demand delivery service of daily essentials. It was primarily started as a hyperlocal delivery startup for the convenience of local shops and their residents. Albinder Dhindsa and Saurabh Kumar, the respective CEO and company founders saw this incredible opportunity to bridge the gap between the two parties. Today, it offers over 7000 daily essentials in over 30 Indian cities. It includes some of the highly populated urban cities like Delhi, Gurgaon, Mumbai, Noida, Kolkata, and Jaipur among many more. In June 2022, Zomato acquired Blinkit for a $568 million all-stock deal.

Blinkit Business Model

The business model for Blinkit is divided into three major segments – local vendors, local consumers, and the delivery staff.

  • Local Vendors

Blinkit offers tie-ups to the local stores. Especially, the ones who don’t have any marketing budget to grow their business outreach and also lack sufficient manpower for doorstep delivery.

  • Local Consumers

The inception behind the business idea relies heavily on the group of people who find it difficult to make time for physically going to the market for daily shopping. It includes working people, senior citizens, students, or also ill people.

  • Delivery Staff

Blinkit has its team of delivery agents assigned within a locality. They coordinate with shops and ensure timely delivery of daily essentials to customers’ doorsteps.

Upgraded Business Model

The initial version of the Blinkit Business Model didn’t justify the idea for its establishment. It faced huge losses, got unsatisfactory results, and criticism for its services. One major reason for such feedback was the unreliability of local shops.  While sometimes it was incomplete orders from the shopkeepers, other times it was the quality of products delivered to the customer. As a result, it got negative feedback and a bad user review online.

To solve the bad reputation, Blinkit shifted to the inventory-based business model. And the shift was necessary because this was also the time when its competitors such as Amazon were also expanding in the online grocery market. Hence, the shift was an obvious choice to ensure their business survival and livelihood.

So now, instead of a local shop, Blinkit runs its grocery delivery business from inventories. The rest of the working procedures were the same – from inventory to customer using its delivery agent.   

How does the Inventory-Based Business Model work?

Initially, the grocery items ordered by a customer were delivered directly from the local store. In the upgraded business model, the grocery is first transferred to a local warehouse. Here, the inventory staff ensures if the food products are of standard quality or not. Once they are satisfied with the food quality, only then it is packed and transferred to a customer.

This inventory-based business model has helped Blinkit significantly to build its reputation in the Indian grocery delivery sector. While many players are making the most of online food delivery in the country, Blinkit stands out for its better control over delivery. It works efficiently to ensure on-time delivery of quality food products to its customers.

How does Blinkit Earn Money?

The process of delivering from a warehouse has several segments in the middle. From logistics, delivery partners, suppliers, and vendors to technology partners, and merchant partners, the list is long. But this is where the money comes from. Here’s how Blinkit makes revenue.

Blinkit monitors the quality of all the grocery items procured in a warehouse. This helps them to efficiently manage its overall procedure. Now, when a user places an order on the Blinkit mobile application, it connects various brands and local shops on the go. In the process, Blinkit takes a commission of 8% – 15%. In addition, Blinkit is also investing in private brands, something that is already turning out to generate high revenue streams.

With the help of both private and affordable regional brands, Blinkit makes up to 20% of the total revenue generated.

 Online Grocery Mobile Application Development

Getting an insight into how Blinkit makes money and understanding its business & revenue model is one crucial aspect. If you are aspiring to replicate the business tactics, you should also have a user-friendly mobile application. Here are a few things you should keep in mind to make it work in the first place.

  • Determine your audience – age, location, preferences, and more.
  • Figure out the problems they are facing in using such services.

These factors will help you figure out a plan on how your app is going to look and feel. It will also help you get a better understanding of the customer app & website, admin dashboard, and other essential features of the application. Above all, the process helps you to come up with something unique that makes a difference in the way people use similar services.

Cost of Grocery Application Development

The total cost of building an app like Blinkit depends on numerous factors. These factors have their separate costs. Let’s take a look.

  • UX/UI Design

The first and the most important aspect of any app is its basic outlook. For instance, does a user find it easy to navigate and understand the app or not? The UX/UI designing cost of a grocery delivery application also depends on its sophistication, among other factors.

  • Coding Structure

There are dozens of programming languages that can be used to code the algorithm of an application. However, different languages have varying versatility in completing a specific project efficiently. Moreover, this aspect is more dependent on the development team you choose.

  • Features

The features and functionality you opt to go with influence the overall cost of developing an application. If you go with the basic features, the price will be low but will be of limited use. The best way to compete in the grocery delivery business is to offer the best features you possibly can. So, even when you are looking to expand your business after some time, the features you have will not hinder the transition.

Feature-wise App Development Cost

  • Platform

The cost of deploying an application on iOS is slightly higher than that of Android. In addition, there are several aspects to it such as the development of an admin panel, user panel, and more. So, if you are looking for better convenience for everyone involved in the process, you might go with both – Android and iOS. And that will cost even more.

  • Development Team

The collective expertise of your development team influences the quality of the application and how quickly it gets deployed. In addition, a lot goes into the development of an application after coding. It includes months of testing and debugging. In short, going with an experienced development team is always a better option.

Final Thoughts

As per a study by Grand View Research, the Indian online grocery market is valued at $2.9 billion in 2020. Interestingly, it is also projected to grow at a compound annual growth rate of 37.1% for the next five years. So, the market for e-delivery services for groceries is such that you’re more likely to have a good ROI.

However, your path to making money in this lucrative opportunity goes via offering better services than the established market players like Amazon, Big Basket, etc.  For that, you must do thorough market research first. Try to find out the existing loopholes in the way online grocery delivery services are being offered and come up with an innovative alternative.

Looking for a reliable development team for your online grocery delivery business? Code Brew is here at your service.

Our team of expert individuals has a track record of developing apps for many food startups like Fiji Eats. Check out our portfolio here. Contact us to get a demo.

July 25, 2022

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