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Twitter on Monday evening was all about Zomato's new campaign.
CEO/Co-founder Deepinder Goyal pitched a 4 pager document explaining how Zomato will deliver in 10 mins.
To understand this in more detail, let us look at what Blinkit is doing.
Grofers rebrands to Blinkit 🛒
Grofers was started back in 2013 with an idea to match the grocery demands of the customers. Grofers assured their customers of quality products in a few hours at their doorsteps. They adopted the superfast hyperlocal delivery model (delivering products directly from sellers to customers) but later pivoted to inventory-based model (A model where the company tries and have their store/house in every 3-5 km range and gigs deliver the product from stores to customers' homes). For customers, shopping grocery online was a wow moment. Again this is before the internet(Jio) revolution in India. E-commerce was new back then (Amazon came to India in 2013). With raising different fundings and expanding the online grocery, Grofers was almost in all the tier-1 cities. As of December 2021, the company is serving more than a million orders per week.
They officially became a unicorn in August 2021, after raising $100 million in funding from Zomato. Interestingly Zomato was trying to acquire Groffers for years. They even tried their grocery delivery service but failed.
Here comes the twist!!
Grofers rebranded itself as Blinkit on 13th December 2021 and announced their intention of a flat 10 mins delivery system. Initially in 12 big cities and eventually in all cities. Blinkit is not all about groceries now, you will find groceries, stationaries, air-cooler, and whatnot in 10 mins. The company has pivoted from a planned purchase model (Myntra, Flipcart comes into this model) to a quick commerce model (Big Basket, Zepto comes into this model).
The last time when a company made so much noise about the delivery time, it was a Pizza franchise- Domino's with their 30 minutes of the free campaign. Eventually, they had to close the campaign because of an increase in road accidents.
Blinkit claims to be packing an order within 2 minutes of receiving it. Zomato will have to do the same.
Over pampering the customers 👶
Zomato is trying to pull down its average delivery time of 30 mins to 10 mins. There will be a sharp reduction in Zomato's Average Order Value ( which is currently ₹400). Thus making it difficult to sustain on the retailer's money. Zomato's instant offerings will include food ordered between the meals like tea, coffee, instant noodles, etc. Zomato is in the process of acquiring a ~17% stake in Mukunda Foods, a kitchen automation startup, for $5 million to accelerate the process.
With the merger with Blinkit, Zomato will have to loan a hefty amount to Blinkit to expand. The unit economics are not clear. Zomato runs on the public's money while its rivals are leveraging ventures funds. Blinkit rival Zepto raised $160 million in just two months late last year, and Swiggy committed $700 million to its quick commerce offering, Instamart.
But even if Zomato can pull off its quick service ambitions, the more important question to ask is this: what will a snack-heavy menu do to Zomato’s Average Order Value?
Things are a little bit complicated here but Deepinder is very much confident (Don't know why).
Ohh! Zomato is now a food delivery and a quick commerce company.
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Ciao
Nishchal from Team Rubric
Zomato's Mission Impossible 🛵
Very insightful! Loved it!