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Ashneer Grover believes that Blinkit will die
He said that 10 min delivery is a completely flawed model and will never be able to make money!
The crazy part? He was himself the CFO of the company in its early years
But here’s why Blinkit is doing this and why it might succeed:
When Blinkit was Grofers, they used to do grocery delivery mostly.
The problem that Ashneer saw was that, in India, there’s no stocking culture.
People want everything fresh, and since they are getting it quickly, they don’t want to order all at once.
So, what happens is — instead of stocking groceries, people don’t mind getting more deliveries over time.
But if Grofers had to make money, the ticket size (or Average Order Value) also had to increase.
That wasn’t happening, so they switched to Blinkit — 10 min delivery.
Now, Blinkit comes with its own woes because there’s no way you can create profits while maintaining such a high cost that comes with the quick delivery setup.
So, rationalizing its delivery fleet is definitely one of the biggest challenges for Blinkit.
But what most people don’t understand is that Blinkit is not just a simple daily items delivery app.
It is a service that breeds on impatience and makes you form a habit of it.
They switched from delivering groceries to delivering everything in 10 mins.
And once you’re hooked, as we all are, they can sell anything of high ticket value to feed your impatience.
People now relate to Blinkit with fast convenience & this ensures their product stickiness.
Most startups prioritize growth over short-term profitability, and their key to growth is habit-forming products.
Because once a habit is attached to a product, it builds a loyal customer base that generates recurring revenue.
In fact, they have started introducing new products and services like: — 10 min cosmetics delivery — iPhone 14 in minutes!
But one that stands out the most is its Last-minute Printout Delivery.
You can now upload your documents on the Blinkit app to get your documents printed and delivered to your home in a sealed envelope.
The best part about this is that once you upload the document on the app, it goes as a print instruction to the printer in one of the nearby stores and gets printed automatically.
The files are deleted from their systems after that.
A picker then puts the documents in an envelope and seals the package.
Once sealed, no one other than you can open it.
So, you don't have to worry about last-minute emergencies like printing your boarding pass or flight tickets, or maybe last-minute assignments because its printout services run from 6 am to 12 am.
Blinkit found an interesting problem to solve with the printout delivery, and they will keep on finding such problems that can be solved with 10 minutes delivery.
Another way they are optimizing for high AOV, and thus revenue, is with features like AI-generated recipes for bulk ingredient orders.
Blinkit has launched AI Recipe Rover, which suggests instant recipes and gives you a curated list of ingredients needed to cook them that you can order at the push of a button.
See, usually, companies try to build apps around the culture that’s already existing.
But in the case of Blinkit, they are trying something new.
Blinkit and a lot of other startups are bringing a behavioral shift in the form of a Non-ownership-based Economy.
Last year, Dunzo launched an ad campaign around — Ab fridge ka kya kaam hai.
The idea behind this ad campaign was that since you can get everything fresh in just 19 minutes, you don’t need your fridge to store groceries or food.
They are creating this non-ownership-based economy model where you don’t need to have a lot of entities at your home, like a fridge or a printer.
You pay for what you consume or experience rather than buying physical objects.
People in India still own washing machines.
But in the next few years, we will have laundromats with a service model where you can just send your clothes, pay a monthly subscription fee, and don’t ever have to worry about taking care of them by yourself.
The world is moving towards an economy where you will own nothing and be absolutely okay with it.
Outcomes >>> Ownership
Years ago, it was normal to buy the latest music at a record store and rent the latest movies and video games from a video store.
People had collections of albums, movies, and video games.
The same content can now be accessed from anywhere, at any time, across any device.
Services like Spotify, Netflix, and Xbox Game Pass have transformed these limited and prized collections into a commodity.
Anyone can easily access more albums, movies, and video games than could ever fit into a home.
For this convenience, we need to pay a monthly fee that’s generally smaller than purchasing albums, movies, or video games.
People might say that these apps are useless or make them lazy.
Who would use the 10-minute printout delivery service when they can get it done nearby?
The thing is — as you become used to getting all these things quickly and comfortably, you wouldn't want to go back to older systems.
