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Deepinder Goyal, the visionary founder and CEO of Zomato, has shed light on the strategic importance of Blinkit, Zomato's quick commerce venture, within the company's overall strategy. While many might assume that Blinkit's rapid delivery model would directly compete with traditional kirana stores and departmental stores like DMart, Goyal asserts that Blinkit's primary target is the online retail sector, specifically giants like Amazon and Flipkart.
Goyal's assertion is based on his observations and the statements of other industry leaders. He notes that DMart's CEO has acknowledged that quick commerce has not had a significant impact on their business. This suggests that Blinkit, with its focus on speed and convenience, is carving out a niche within the online retail space rather than threatening established physical retailers. By offering lightning-fast delivery of groceries and other essential items, Blinkit is effectively targeting the customer segment that values convenience and immediate gratification, a segment that is already heavily engaged with online platforms like Amazon and Flipkart.
The acquisition of Blinkit in 2022 for a hefty $568 million was not a whimsical decision, but rather a move born out of necessity. Goyal candidly admits that without Blinkit, Zomato's future would have been precarious. The company recognized the need to expand into the last-mile delivery network, an area where Blinkit had already established a significant presence. This strategic move provided Zomato with a critical infrastructure for delivering food, effectively bolstering its core business. While Zomato could leverage its existing delivery network to enter the quick commerce sector, the reverse transition from food delivery to quick commerce was deemed more challenging due to the complexities involved in managing dark stores and supply chains.
In retrospect, while some may criticize Zomato's vision or strategy in acquiring Blinkit, Goyal emphasizes that the company acted decisively to ensure its survival. The acquisition was a survival instinct move, a calculated risk taken to secure a future in a rapidly evolving market. It remains to be seen how Zomato's integration of Blinkit will play out in the long term, but the initial focus on targeting the online retail giants rather than traditional brick-and-mortar stores seems to be a well-considered strategy for carving out a niche in the competitive landscape of e-commerce and quick commerce.
Source: Zomato's Deepinder Goyal: Blinkit is eating into Amazon, Flipkart's sector, not DMart or kiranas