Blinkit, which spent Rs 600 crore between November and February to expand the business and acquire customers in the cash-guzzling and deep-discounted grocery delivery space, is now looking to cut costs and has reduced its cash burn, these people said.
"They had signed up a lot of dark stores which they are not going to use. They have been checking with rival companies if anyone is interested in buying the infrastructure at depreciated rates," said one of the sources quoted above.
The company currently has close to 445 dark stores after shutting down approximately 40 of them in the last couple of months.
The company also faced complaints on social media for promising lightning-fast grocery delivery and then for not being able to commit to its promises many times, in the last few months. Customers alleged that their orders were shown as delivered even though they didn't get any delivery in the stipulated time.
"They are not setting up any new facilities. Instead, the existing dark stores have been asked to utilise their full capacities," said another source confirming that a vendor who works with Grofers has also been facing delay in payments.
"Earlier the payment used to happen in 30 days of raising the invoice. Now that is being delayed to 45-50 days," said the person quoted above.
While the company did not respond to a detailed set of questions, it confirmed that its fundraise was happening and it was taking efforts to rationalise costs."Our business has grown 2.5x since November. Our fundraising is on track, and we continue to hire in key positions, while we also continue to remove costs that are now redundant due to a pivot in our business from a next-day grocery service to a 10-minute e-commerce business," a spokesperson said.
While the jury is still out on whether people actually need essentials in 10 minutes and if this is a sustainable business model, competition has heated up in this space. From new entrants such as Zepto to Swiggy's Instamart to Dunzo, everyone wants a slice of the action. SoftBank-backed Blinkit recently pulled the plug on areas that it cannot service within 10 minutes."We are singularly committed to instant delivery-focusing only on areas where we are serving under 10 minutes," Blinkit founder and CEO Albinder Dhindsa had said.
Swiggy, which also counts SoftBank as an investor, is investing $700 million in its express grocery delivery business Instamart, throwing down the gauntlet to rivals.
Apart from Blinkit, Swiggy, Zepto, Google-backed Dunzo, Walmart-owned Flipkart, Amazon, Tata-owned BigBasket, and Reliance-JioMart are all hankering after quick commerce, as more Indians shop for daily essentials online.
Zomato did not comment for the story.