The October to December period, or the third quarter of FY25, was the most competitive quarter in the last 2-3 years, Albinder Dhindsa, CEO of Blinkit, the quick commerce market leader, told analysts on January 20.
His comments come at a time when Blinkit’s rivals such as Swiggy Instamart, Zepto, Flipkart Minutes and Tata BigBasket are all entering a land grab mode as they look to capture a larger share in India’s red-hot $6 billion quick commerce industry.
Blinkit, for the first time, revealed that it had a 42 percent customer retention rate during the October-December quarter, an increase of one percentage point from 41 percent seen during Q2FY25. While the industry average is not yet known, 42 percent is considered a good number, as per analysts.
“It’s still early days…but his customer base contributes to about one third of our gross order value (GOV). They have been with us for more than two years now and their retention has actually increased…despite perhaps this quarter being the most competitive that we've seen in the last 2-3 years,” CEO Dhindsa told analysts while discussing the company’s quarterly results.
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A competitive market means companies spend more on marketing, acquiring customers, discounts and more.
“...heightened competition has led to a pause in margin expansion in the business, which is expected and should be temporary,” Dhindsa said in the letter to shareholders. Blinkit’s margins are in the 18 to 20 percent and the take rate is likely to hover in that range because of rising competitive intensity.
To pull more customers, the company also spent more money during the three month period. During Q3FY25, Blinkit recorded an adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) loss of Rs 103 crore, a 16 percent increase year-on-year (YoY) from a loss of Rs 89 crore incurred during the same period last year.
That was largely because the company advanced its expansion plans to ward off rivals, including Amazon which is testing out its rapid delivery business in India.
“As of now, it seems like we will get to our target of 2,000 stores by Dec 2025, much earlier than our previous guidance of Dec 2026,” Deepinder Goyal, co-founder and group CEO, Zomato said in the company’s shareholder letter. As of Q3FY25, Blinkit's store count crossed the 1,000-store mark, one quarter ahead of plan.
Blinkit, is however, well capitalised, thanks to the latest fund infusion of Rs 500 crore from Zomato, its parent company.
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