Startup and VC Ecosystem Updates | Issue# 10 [December 20, 2024]
What?
Zomato-owned Blinkit has expanded its services with the launch of Bistro, a new quick food delivery app. Currently in the pilot phase, Bistro operates in select areas of Gurugram and other areas of Delhi-NCR, delivering meals, snacks, and beverages in under 15 minutes, as reported by Inc42 and YourStory. This move positions Blinkit in direct competition with established players like Zepto Cafe and Swiggy’s Bolt in the emerging 10-minute food delivery market.
Why?
Consumers enjoy the instant gratification of having their needs met – an appeal that fueled the quick commerce boom and now drives quick commerce giants to focus on fast food delivery. Blinkit’s move to expand its offerings reflects evolving consumer expectations, growing competition in quick commerce and quick food delivery, and aligns with Zomato’s broader strategy to scale Blinkit’s operations and boost its revenue, supported by the recent INR 8,500 Cr ($1 Bn) fundraise. Blinkit reported a revenue of INR 1,156 Cr in Q2 FY25, up from INR 505 Cr in Q2 FY24, showing a 23% Quarter-on-Quarter (QoQ) growth from INR 942 Cr. Its adjusted EBITDA loss narrowed to INR 8 Cr in Q2 FY25, significantly improving from a loss of INR 125 Cr in the same period last year.
Additionally, Blinkit has recently launched a host of new features to strengthen its market dominance. Newly added capabilities includes Blinkit Seller Hub to help brands list on the platform, EMI option for customers with purchases above INR 2,999, and a pilot program to test a large order fleet to help deliver bulkier consumer products within Delhi-NCR. The new capabilities reflect Blinkit’s commitment to enhancing convenience for its users while driving long-term value for its partners.
Competition
The competition in the quick food delivery space has been intensifying for a while. Zepto Cafe, which pioneered quick snack delivery in Mumbai in 2022 by offering both branded and non-branded pre-made food items, recently announced plans to expand its service to 120 cities and spin it off into a standalone app to deliver snacks and beverages within 10 minutes. Currently, Zepto Cafe delivers around 30,000 orders per day. However, Blinkit’s Bistro boasts of a wider range of SKUs, compared to Zepto Cafe.
Swiggy’s Bolt, launched earlier this year, has gained traction by partnering with restaurants, achieving significant order volumes and targeting expansion to over 400 cities. In fact, Bolt accounts for about 5% of Swiggy’s total orders within two months of its launch. Bistro, on the other hand, operates independently of restaurant collaborations, focusing instead on delivering ready-to-eat meals and beverages. Earlier this year, Swiggy launched Cafe, offering users a curated selection of snacks and beverages delivered within 15 minutes.
Notably, India’s third-largest food delivery app, magicpin, recently partnered with certain brands to introduce magicNOW and offer 15-minute food delivery in select cities. Moreover, BigBasket too does not want to be left out of the quick food delivery race and plans to offer a diverse range of food items with a 10-minute delivery service.
The quick food delivery sector, fueled by rapid delivery promises, has attracted both established players and emerging startups aiming to capture market share. Swish, a new entrant in the food delivery space, aims to disrupt the traditional experience of ordering food by offering ultra-fast 10-minute delivery across select locations in Bengaluru. Zing, another new startup in the space, recently introduced its 10-minute food delivery service in Delhi-NCR. The focus on convenience and speed continues to reshape the food delivery market in India.
Thoughts
Bistro would join Zomato’s house of brands, alongside other apps such as Zomato, Blinkit, District, and Hyperpure. Well, today’s consumers require instant gratification of needs – from grocery and electronics to food and beverages. Moreover, quick food delivery is emerging as an important focus area for quick commerce companies. Given the changing consumer expectations and increasing competition in the quick food delivery space, Bistro seems to be a strategically well-timed offering from Blinkit. Starting small within a geographical area and gathering user feedback to understand what is working and what needs to improve before going for scale indeed seem to be a smart strategy. It is possible that the quick commerce major might be leveraging its strong network of dark stores (or some other form of fulfillment centers) to a certain extent to fulfill the orders. It is likely that Zomato will consider partnering with brands and restaurant partners to deliver a broader range of food items through Bistro – not just snacks, ready-to-eat meals, or beverages – similar to its competitor Swiggy, as it seeks to expand its SKUs and grow its offerings.
15-minute food delivery is more of an execution play, fraught with logistical and sustainability challenges. Issues related to inventory management, delivery logistics, high operational costs, and the need for densely located fulfillment centers to meet the delivery promise adds operational complexity and financial burden. Interestingly, Zomato had previously dabbled in quick snack deliveries. The foodtech major’s 10-minute food delivery experiment in Gurugram, Zomato Instant, was plagued by low order volumes and failed to recover the fixed operational costs. The company ended up rebranding the vertical in 2023 and was said to be working on a new menu. In October this year, Blinkit revealed its plans to launch a Bistro-like offering called Cafe for quick snack deliveries. It has not yet been confirmed if the Cafe feature evolved into what we know as Bistro today.
Well, at this point, Zomato, with its scale and resources, is well-positioned to address the operational challenges of quick food delivery. With user demand for faster deliveries growing and competition intensifying, Bistro is poised to become another successful addition to Zomato’s portfolio. We eagerly await its success and expansion to other Indian cities.
If you are interested to learn more, feel free to check out this coverage by Inc42 and this article by YourStory.
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Acronyms used in the blog that have not been defined earlier: (a) Venture Capital (VC), (b) National Capital Region (NCR), (c) Indian Rupee (INR), (d) Billion (Bn), (e) Crore (Cr), (f) Financial Year (FY), (g) Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA), (h) Equated Monthly Instalment (EMI), and (i) Stock Keeping Unit (SKU).