Zomato Eyes Direct-to-Consumer Dominance Through Blinkit Expansion

Gurugram-based Zomato is making strategic moves to bolster its presence in the direct-to-consumer (D2C) space, intensifying competition with e-commerce giants Amazon and Flipkart. The company, led by Deepinder Goyal, aims to enhance Blinkit, its 10-minute delivery platform, by establishing an in-house back-end supply chain.

Front-End Boost for Blinkit

According to media reports, Zomato's plan involves augmenting Blinkit's front-end capabilities by creating an internal supply chain. This initiative will involve sourcing, managing inventory, and facilitating the distribution of various brands directly. Multiple sources familiar with the matter revealed that the move aims to give Zomato greater control over its supply chain and compete effectively in the quick-commerce segment.

Rising Trend in Quick-Commerce

The decision to strengthen Blinkit's offerings aligns with the growing trend of new-age brands favouring quick-commerce as a vital sales channel.

ET quoted an insider commenting, "Blinkit has a strong footing there...now Zomato wants to set up a back-end structure where it would work directly with brands and help them sell on Blinkit."

This approach is expected to empower Zomato in engaging directly with brands and facilitating their sales on Blinkit.

Strategic Attempts and Warehousing Leaps

As part of its strategy, Zomato has reportedly made two attempts to acquire and merge with ecommerce enablement firm Shiprocket. Meanwhile, Zomato has leased warehouses in New Delhi and Mumbai, signaling its commitment to supporting Blinkit's ecommerce endeavors.

Hyperlocal Warehouses and Delivery Advantage

Zomato plans to leverage hyperlocal warehouses and expedited delivery timelines to outshine competitors like Walmart-owned Flipkart and Amazon. By doing so through Blinkit, Zomato aims to carve a niche in the market and offer consumers a seamless and rapid shopping experience.

Diversification Beyond Core Business

Both Zomato and its rival Swiggy have been diversifying beyond their core business in the past year. Zomato, known for its food delivery services, entered the business-to-business grocery supply space with Hyperpure. Swiggy, on the other hand, ventured into the ecommerce marketplace with Minis, focusing on local delivery of D2C brands across various sectors.

Long-Term Growth Driver

Zomato's expansion into the D2C space is seen as a strategic move for long-term growth. The company has engaged in discussions with individual brand owners across different categories to build up its inventory. Reportedly, Zomato plans to manage the flow of products for D2C brands, similar to traditional marketplaces, without directly owning any inventory.

As Zomato gears up for a significant play in the D2C space through Blinkit's expansion, it sets the stage for a fierce competition with established e-commerce players. The company's focus on building a robust supply chain and engaging directly with brands underscores its commitment to offering consumers a swift and diverse shopping experience. The evolving landscape of quick-commerce will likely witness Zomato's innovative strategies challenging the dominance of industry heavyweights.

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