Blinkit looking to expand dark store count by 40% over 12 months

Quick commerce player Blinkit is looking to expand its micro-fulfilment centres or dark stores, targeting up to 40% increase in store count in the next 12 months, according to company CEO Albinder Dhindsa.

The company, which was acquired by online food delivery firm Zomato last year, currently has over 400 dark stores that act as warehouses.

"We have identified several new high potential neighbourhoods in existing as well as new cities. We should start seeing the net dark store number increase going forward," Dhindsa said in an earnings statement.

He further said, "We are seeking opportunities for store openings in high potential areas based on the data our systems generate, the management bandwidth and time to supply creation."

Dhindsa, however, said unlike the food delivery business, the growth in quick commerce business is dependent on various factors such as availability of product from the brand, seller ability and supply chain capacity.

"Only when we feel confident that we can provide a great experience for our customers in a high potential location, do we start the process of opening new stores. Currently, we believe that we can comfortably grow our dark store count by around 30-40% over the next 12 months," he added.

This will also depend on the company's ability to find the best and most cost effective locations for these stores, Dhindsa said.

In the third quarter, he said Blinkit was less impacted compared to the food delivery business as "our typical purchase basket tends to be more skewed towards essential/non-discretionary spends."

The slight downward pressure on average order value might be a result of the slowdown where customers are preferring to buy smaller packs instead of larger ones, he said, adding, "Overall however, the last quarter was the highest ever in terms of new and returning customers."

Blinkit posted a revenue of Rs 301 crore in the third quarter ended December 31, 2022, up 28% quarter-on-quarter (QoQ), while gross order value (GOV) stood at Rs 1,749 crore, a growth of 18% QoQ.

"All of this growth has come without any expansion in our dark store footprint...," Dhindsa noted.

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On advertising income becoming a meaningful source of revenue for Blinkit, he said, "We expect advertisement revenue to be a significant driver for increase in revenue per order going forward."

In line with that vision, he said, "We launched our new self-serve advertising platform for brands - Blinkit Brand Central, in December 2022. The self-serve platform allows brands to bid on their search keywords of interest, as well as create customised brand stores on the platform."

Blinkit has become a preferred platform for advertising and engagement for over 500 brands, he said, adding "these brands, large and emerging, use us to build brand awareness and to also push their sales on the platform with performance advertising."