Amid Zomato’s Zooming Losses, Blinkit Targets Scaling Dark Stores By 40% Over A Year

Quick commerce platform Blinkit plans to scale its dark store count by up to 40% in the next 12 months, according to chief executive officer (CEO) Albinder Dhindsa.

“Currently, we believe that we can comfortably grow our dark store count by ~30-40% over the next 12 months. This will also depend on our ability to find the best and most cost effective locations for these stores,” said Dhindsa in a letter to shareholders.

The startup claims to have identified several new ‘high potential neighbourhoods’ in both existing and new cities to ramp up the number of such micro-fulfilment centres.

The CEO, however, said that the startup would move ahead with the plan only when it ‘feels confident’ of providing a ‘great experience for customers in a high potential location’.

Citing three major factors, Dhindsa noted that the q-commerce platform was exploring opportunities to open dark stores based on the data generated by its systems, the ‘management bandwidth and time to supply creation’.

Presently, the q-commerce major has more than 400 dark stores. Interestingly, no new dark stores were opened by Blinkit in the third quarter (Q3) of the financial year 2022-23 (FY23).

A major chunk of Blinkit stores, almost half in Q2 FY23, are currently being operated in partnership with local franchise partners. These fulfilment centres generally range from 2,000 to 3,000 sq.ft. and involve a capital expenditure of nearly INR 20-30 Lakhs. 

Meanwhile, Blinkit has also been streamlining operations at its existing dark stores. It was evident as gross order value (GOV) per dark store saw a spurt in Q3 FY23, without any expansion in its dark store network. 

This comes a week after Blinkit’s parent company Zomato released its financial results for the quarter ended December 2022, which saw the foodtech major’s consolidated net loss zoom 70% YoY to INR 346.6 Cr in Q3 FY23.

However, Blinkit, which was acquired by Zomato last year, saw a mixed quarter as most key operational and financial metrics saw improvement in the quarter under review. The q-commerce vertical contributed an adjusted revenue of INR 301 Cr in Q3 FY23 to Zomato’s kitty, even as GOV rose 18% YoY to INR 1,749 Cr in the quarter under review.

As pressure mounted in the aftermath of an underwhelming quarterly results and degrowth in its food business, Zomato announced on Monday that it pulled out of around 225 smaller cities in India last month, owing to poor performance over the past few quarters.

Shares of Zomato closed 2.7% lower at INR 50.40 on the BSE on Tuesday.