Ashneer Grover Reveals the Real Reason Behind Blinkit/Zepto Issues: It's Not the Rs 15 Payout
Blinkit Delivery Executives Strike as Ashneer Grover Highlights the Real Problem with 10-Minute Delivery Model
17 April 2023
Co-founder of BharatPe Ashneer Grover emphasized the unfeasibility of the 10-minute delivery approach utilized by delivery companies Blinkit and Zepto.
Forcedly low delivery costs cannot address the model's low ticket size and poor profit issues.
The difficulties that Blinkit and other delivery services encountered highlight the requirement for a sustainable and financially viable business strategy in India's rapidly expanding food sector.
BharatPe co-founder Ashneer Grover recently posted on Twitter about the continued problems that delivery companies Blinkit and Zepto are encountering. He noted in a tweet that the issue with these businesses is not the lower compensation of Rs. 15 per delivery, but rather the lack of unit economics in the 10-minute delivery model. The low ticket size and low margin associated with this model, according to Grover, who is also the former CFO of Grofers (now Blinkit), cannot be resolved by enforcing artificially low delivery costs.
Grover's tweet gained a lot of attention and received a variety of responses from online users. Many users concurred with his analysis of the problem, with one remarking that the 10-minute delivery concept was unworkable at peak hours when delivery times may reach 30 minutes. Another user made the observation that the 10-minute delivery concept is a loser due to the lack of economics and safety issues.
Zomato-owned Blinkit has changed how riders are paid so that it rewards them for their hard work. Delivery executives, who allege that the new compensation structure will reduce their income in half and make their positions untenable, have protested in Delhi-NCR against this decision. Blinkit is said to have closed over 100 dark kitchens in the Delhi-NCR area as a consequence.
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Grover's remarks have highlighted the difficulties encountered by businesses participating in India's rapidly expanding grocery industry. Other significant delivery companies that compete with Blinkit include those funded by Reliance, Tata, and SoftBank, such as Dunzo, BigBasket, and Swiggy.
Grover is still upbeat about the prospects of the Indian grocery business despite the difficulties Blinkit and other delivery services are now experiencing. He thinks this industry has a tonne of room to develop, but it needs a sustainable and financially sound business plan. He pointed out that Blinkit's path had been marked by ups and downs, from an initial 90-minute bull run to an immediate following bear run to the present 10 minutes of bull run. Grover is curious about the prospects for companies like Blinkit and others in the supermarket industry.