Zepto vs Blinkit: Quick-Commerce Titans Redefine Grocery Retail

HSBC's report questions the viability of Blinkit's adoption of a Super-Saver program akin to Zepto's due to potential margin reductions. While Zepto targets planned purchases, Blinkit focuses on premium convenience, shaping distinct strategies in the quick-commerce space without compromising their core business models.

An HSBC Global Research report raises doubts about the feasibility of Blinkit introducing a pricing model like Zepto's Super-Saver program. Should Blinkit opt for this approach, it could push its Average Order Value (AOV) up to Rs1,200, but its EBITDA margins would face a decline from 6% to 3.5%.

Blinkit's current strategy leverages a higher AOV of around Rs670, positioning itself as a premium, convenience-oriented quick-commerce platform. Any move to implement heavy discounts might undermine its existing business model and profitability, potentially reducing its absolute EBITDA projections for FY30 to USD 1.1 billion, slightly below the expected USD 1.3 billion.

Meanwhile, Zepto's Super-Saver program is reshaping the quick-commerce landscape, focusing on capturing value-driven shoppers with significant discounts on grocery purchases requiring a minimum AOV of Rs999. This strategic shift aims to encourage larger, planned orders, increasing Zepto's Total Addressable Market by tapping into both impulse and bulk purchase sectors despite the margin reductions.

The ambitious move positions Zepto to redefine quick-commerce by competing against modern retail outlets and traditional grocery stores. Nevertheless, this comes with challenges, including pressure on margins and untested changes in consumer shopping behavior towards embracing quick-commerce for planned grocery purchases.

(With inputs from agencies.)