Zomato is expanding its e-commerce capabilities through Blinkit, aiming to widen its offerings in the burgeoning direct-to-consumer (D2C) sector. This initiative involves Zomato establishing its own supply chain to directly procure branded products and manage inventory, according to sources familiar with the plans revealed to ET Retail. As Zomato delves into expanding its 10-minute delivery platform, Blinkit, by incorporating brands across various new categories, it anticipates competition from established e-commerce players like Amazon and Flipkart.
This expansion into the D2C space doesn’t entail Zomato directly owning inventory but rather overseeing the product flow for D2C brands, similar to the operations of online marketplaces. Despite declining to comment on ET’s inquiries, Zomato has reportedly made efforts to acquire and merge with ecommerce facilitator Shiprocket on at least two occasions, which Shiprocket declined.
Also, Zomato’s recent leasing of warehouses in New Delhi and Mumbai signifies its commitment to bolster Blinkit’s e-commerce push. Alongside its core food delivery and quick commerce segments, Zomato also operates in B2B grocery supply via Hyperpure, the going-out segment with Zomaland, and a dining-out vertical.
With analysts eyeing Blinkit as Zomato’s next growth avenue amid a slowdown in its core business, Zomato aims to collaborate with D2C brands to strengthen its supply chain and control over operations. By leveraging hyperlocal warehouses and expedited delivery, Zomato seeks to challenge established players like Flipkart and Amazon through Blinkit.
For Blinkit, diversifying its product categories, particularly in the D2C realm, aims to boost its average order value (AOV), a pivotal metric for revenue growth. While margins could have been stronger if not for the slim margins typical in the grocery business, Blinkit’s focus on higher-margin products like consumer electronics and personal care items is expected to enhance profitability.
Blinkit capitalizes on events and occasions to market itself as a comprehensive platform for D2C products, enabling swift inventory turnover and higher-margin sales compared to groceries and FMCG items. This includes offering a range of products, from flowers to high-end smartphones, catering to various consumer needs and preferences.