Lal Bahadur Shastri Institute of Management, Delhi

Supply Chain Management

REPORT ON:

On demand delivery and crowd shopping, bucketing of inventory

Submitted by-Group 2

Simran bhutani 006/2021

Manthan Pathak 008/2021
Shubhangi Gupta 032/2021
Abhiram P 040/2021
Devinder Singh 101/2021
Sarvmeet Singh Chhabra 114/2021

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 ACKNOWLEDGMENT

We would like to express our deep and sincere gratitude to our Supply Chain Management
Professor, Dr Balram Tyagi for providing us the opportunity to create this report and
providing invaluable guidance throughout this report.

His dynamism, vision, sincerity, and motivation has deeply inspired us. He has taught us the
methodology to create this report and present it as clearly as possible. We are grateful for the
plethora of knowledge that he has provided us.

Next, I would like to thank the Lal Bahadur Shastri Institute of Management for providing us
a platform to come together and work on this project. Furthermore, we would like to extend
warmest thanks to everyone who helped and guided us on this group project.

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 TABLE OF CONTENTS

S.NO CONTENTS PAGE NO

1 Executive Summary 4
2 Company Overview 5
3 Issues at hand 6
4 Storage and retrieval 6-7
5 Picking 8
6 Billing, disaggregation, and 9
aggregation
7 Blinkit Business Model 10
8 Blinkit Revenue 2021 10-11
9 Blinkit into printing business 11
10 Blinkit Pivot to Q-commerce 12-13
11 Competitor analysis 14
12 Blinkit Future 17
13 References 18

EXECUTIVE SUMMARY
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Online retailers and their logistics partners are under pressure to meet the needs of customers
who are demanding faster deliveries. Both of these trends will likely persist for the
foreseeable future. The daily volume of parcel shipments has increased as a result of the
steady growth of e-commerce. Today, we don't need to go out and purchase our daily goods,
grains, and veggies from the market. All we need is our mobile phone with an internet
connection!

E-tailers must struggle to find a means to provide same-day shipping at reasonable pricing
since fulfilment behemoths like Amazon are always biting at their heels. To do this, they are
testing out novel logistics techniques and start-up partners to see what works.

Currently, there are several applications, websites, and businesses where you may place
orders, with Grofers/Blinkit being one of the most well-known brands. This online retailer
provided us with a selection of necessities that made our lives easier.

To remain true to its tagline of delivering groceries in the blink of an eye, the unicorn of
online grocery delivery supported by Softbank, Grofers, has changed its name to Blinkit.
Zomato currently owns Blinkit after the foodtech unicorn acquired the former on June 24,
2022, for $569 million (Rs 4,447 crore).

COMPANY OVERVIEW

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BlinkIt is an Indian grocery delivery company owned by called Blink Commerce Private
Limited formerly known as Grofers. It was established in December 2013 and is
headquartered in Gurgaon. Albinder Dhindsa and Saurabh Kumar are the founders of Blinkit
as Grofers. In keeping with its goal to promote quick-commerce, Grofers changed its name to
Blinkit on December 13, 2021.

Customers of the business can place online orders for groceries and other necessities using a
smartphone application. The personnel of Blinkit then take possession of the things in their
warehouse and deliver them within 10 minutes to the customer. The organisation was
fulfilling 1.25 lakh orders every day by November 2021. [12] In India, Blinkit is presently
available in over 30 cities. As of 2021, investors like as SoftBank, Tiger Global, and Sequoia
Capital had contributed around 630 million US dollars to the company.

After operating as an online grocery delivery service for seven years, Blinkit launched quick
grocery delivery in India by establishing dark storefronts throughout the country's cities. The
business claimed to have delivered over 7000 goods in Gurgaon in 15 minutes in July 2021.
After completing over 20,000 under-15-minute deliveries each day across 10 cities, it debuted
10-minute delivery in the top-12 cities a month later, in August 2021.

Earlier, the company operated a traditional grocery delivery service. This change was made
to better match the product with the market. The company operates at a high volume, low
margin, and faces intense market rivalry from Zepto, Dunzo, BigBasket and Magic Pin etc.

Now what’s Quick commerce ?

The promise of delivery within 10–30 minutes of ordering was the key component of fast
commerce, or q-commerce.

“We learnt a lot as Grofers, and all our learnings, our team, and our infrastructure is being
repurposed to pivot to something with staggering product-market fit — quick commerce.
Today, we are surging ahead as a new company, and we have a new mission statement —
“instant commerce indistinguishable from magic”. – Albinder Dhindsa
ISSUE AT HAND

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One of every five orders they delivered in March of 2016 was unfinished. There customers
were clearly very inconvenienced by this and began to doubt their dependability. Online
grocery shopping was proving to be difficult in the attempt to establish themselves as a
convenience provider. We were aware that a speedy solution was required to address the
problem of "products missing from orders."

A typical Blinkit order consists of 18 distinct items, all of which must be delivered together
and undamaged throughout transit (4 out of 18 items are fragile, like bottles of jam or eggs).
In addition, 1 in every 18 things needs to be in a temperature-controlled environment (e.g.,
cheese, butter, mushrooms). This normally means that every order including 18 items would
entail the seamless coordination of three different supply chains: those for regular FMCG
products, delicate items, and things requiring cold storage. Also 50% of their orders came for
fruits and vegetables? an entirely distinct supply chain procedure.

Blinkit has been a delivery platform since 2013, but we only started considering fully
managing our own supply chain in September 2015. We had two options: either use off-the-
shelf solutions for everything, from invoicing to inventory management, or create our own
unique suite. Even though we started out with shelf solutions, we soon realised that this
forced us to manage the supply chain in a single approach that would not be the most
efficient for scaling in the online grocery market. Additionally, it did not allow for
innovation, therefore in March 2016, we began creating our own systems. Our fulfilment rate
for orders delivered perfectly through our supply chain was 78 out of 100, and those fulfilled
perfectly from local stores was 60%, implying that we had to pick up orders from multiple
places.

STORAGE AND RETRIEVAL

To increase the efficiency and responsiveness of their operations and to be more agile they
initially required to develop and storage and retrieval system and that too at an affordable and
easy to use way, so that the order can be retrieved as soon as possible form the shelf and go

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for billing and dispatch. So, they equipped their warehouses with QR based storage and
retrieval system.

They sought to move quick, agile and accurate. Enter the "QR codes." In order to save money
and make training users easier, they chose to create a system that would operate on basic
smartphones. Every single shelf in the warehouse has a QR code, which is how the system
works. This QR code contains the position of the shelf.

And this is how it looks like:

The elaborate combination shows the warehouse's aisle and shelf number. Let’s say they
receive 100 packs of Maggi Atta Noodles from their buddies at Nestle. The algorithm
recommends a spot to keep the packets after they arrive at their warehouse. The designated
"shopper" now proceeds to the proposed location, let's say A1-L1-002-003, whips out his
"Put Away" smartphone, and scans both the barcode and the QR code on the item while
simultaneously entering the number of noodle packets. Thus, the system logs the QR code as
the place where these 100 Maggi units are held. They also keep track of the expiration
information for each specific lot (in this example, Maggi).

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PICKING

While real-time inventory sync ensures that incoming orders are only for things that are on
the shelves, the most crucial aspect is that each item in an order is correctly picked and
delivered to the consumer. Once an order is placed on the BlinkIt app or website, the
specifics of the order are communicated to the
warehouse via the picking app, and the person
assigned to the order obtains all of the products.

The picker application serves two functions. The first is to direct the picker to the location of
the 100 packs of Maggi. The second is to guarantee that the picker selects the correct product
variant. Because of the identical packaging, it is difficult for an ordinary store picker to tell
the difference between every variety of a supermarket item, such as the difference between
Vegetable Atta Noodles and Oats Noodles. To address this, the picker scans either the QR

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code on the picking shelf or the bar code on the product to ensure he selects the correct item.
The item is then placed in a crate, and the QR code is scanned.

BILLING, DISAGGREGATION AND AGGREGATION

Once all of the products for an order have been selected, the crate is carried to a billing
counter with our own custom-built Point of Sale system. The POS not only bills an order, but
it also performs a secondary level of check based on product bar codes to ensure that the
relevant items were selected.
Do the correct items and amounts get picked versus what the customer ordered?
In the event of a discrepancy, the warehouse manager must authorise the invoicing on the
POS.

Items are billed separately and returned to the crates. However, there is some disaggregation
here. For larger purchases, we may use many crates, each containing items selected from cold
storage (such as cheese), which are then placed in custom-built cold boxes (which also
feature QR codes - can you tell we adore QR codes?). This ensures that at the end of the
invoicing process, we know there are three different crates carrying the various things for the
same purchase. Our last mile team uses the same information to tell field executives about the
presence of the cold storage box alongside the standard container. Last mile accomplishes
this by scanning QR codes on the crates during delivery; this is another verification step to
guarantee the correct items were selected.

Our Last Mile delivery executive then receives the route plan, which includes the order of
delivery.

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BLINKIT BUSINESS MODEL

Until today, the Blinkit business model did not charge high shipping fees. It is now shifting to
the spike price model. The surge price model is mostly used by the online food delivery
businesses Swiggy and Zomato.

Food prices fluctuate according to demand. Even food prices rise when clients order late at
night or in harsh weather conditions. Similarly, Blinkit is now planning to charge groceries
using a surge pricing mechanism. Grocery prices will now fluctuate depending on demand
and supply.

Albinder Dhindsa, the CEO of Blinkit, is integrating the new business model to generate
profits and positive cash flow. Even to maintain the investors' trust and hope.

Online grocery delivery in India is worth more than $4.3 billion. Companies such as Big
Basket, Dunzo, and Jio Mart are now providing stiff competition. Making money in online
grocery delivery has become much more difficult. So, if the company begins to charge
delivery fees, it will be possible to create revenue. As a result, Blinkit is attempting a new
method of profit and backing some investors.

In India, there is a high demand for online grocery delivery services. Customers are now at
ease with internet deliveries. As a result, the user's behaviour has changed dramatically. Even
Nevertheless, it is clear that consumers are unwilling to return to their former manner. As a
result, there is a significant chance in India to acquire this position. In addition, 10 minutes
delivery is gaining popularity. In the supermarket delivery space, even the startup Zepto is
causing strong competition.
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BLINKIT REVENUE 2021

Former Grofers, now known as Blinkit, have made a significant influence in the online
grocery industry. It is now concentrating on a 10-minute shopping delivery service.

Blinkit startups have produced around 2725 crores in revenue as of 2021. So, there is a
significant increase in revenue in 2021 of 2165 Cr.

The Blinkit startup's platform includes all FMCG products. As a result, Blinkit charges a
commission from the products it promotes. As a result, this sum exceeds 77 crores.

Blinkit, on the other hand, allows retailers to sell their products through its marketplace
platform. As a result, vendors will demand costs such as transaction and commission fees. As
a result, the Blinkit firm has generated 117 crores in income.

In 2022, Blinkit’s revenue was 263 crores. In the previous year, Blinkit 2021 revenue touched
up to 200 crores. Year on Year Blinkit’s revenue is growing significantly. Now the main
motto is to reduce the losses and opens more revenue streams.

BLINKIT INTO PRINTING BUSINESS

The Blinkit company will always be in demand. The rapid commerce market is getting
increasingly cooperative. Quick commerce competitors include Blinkit, Bigbasket, Dunzo,
and Zepto.

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Blinkit has since launched a new business segment. It has been determined to work in the
printing industry. Printouts and printing enterprises are no longer profitable business models.
However, it is not a particularly weak sector. Many folks require emergency printouts.
There is currently no startup on the market that caters to the printing market. The CEO of
Albinder Dhindsa stated that the printout service ranges from 9 to 19 rupees. Even shipping
fees would be taxed at a rate of Rs.25.

BLINKIT PIVOT TO Q-COMMERCE

Grofers, an online supermarket in India, rebranded to Blinkit in order to debut its quick-
commerce service, with the objective of becoming the first e-commerce company to deliver
groceries and other necessities within 10 minutes of a customer's order—or, as the company
put it, "in the blink of an eye!" Grofers was started in 2013 by two engineers, Albinder
Dhindsa and Saurabh Kumar, with the intention of distributing food via an online platform.
Customers may shop on the go with Blinkit and have groceries, fresh fruits and vegetables,
cakes and pastry items, meats and seafood, cosmetics, mobiles and accessories, electronics,
infant care products, and much more delivered swiftly and safely to their door. The
organisation works in 30 cities, with 12-city 10-minute delivery service and basic same-day
delivery.

In all of its operations, Blinkit employs a partnership approach, which means it collaborates
with local businesses and brands, logistics, warehousing, and payment partners, as well as
payment providers. As a result of the enhanced visibility, partner stores received more orders,
and Blinkit benefitted by charging a percentage-based commission on these transactions. It
now offers 10-minute delivery through over 250 partner retailers, with aims to increase to
1000 partner businesses by June 2022.

Blinkit collaborates with large shops to store and deliver things to customers. As part of the
overall store operations, these retailers are responsible for material inbound processes such as
receiving, inward processing, and storing, as well as outbound processes such as picking,
packing, billing, and handing over products to delivery partners within a predetermined time

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frame of 3-4 minutes. Express partners earn a commission of about 30% on monthly sales.
These partners are not allowed to fulfil any online orders other than Blinkit's.

Blinkit offers a platform for young firms to attract and connect with clients from a diverse
spectrum of demographics. Blinkit also provided targeted placement on marketing materials
as well as logistics support, which might help young firms scale. Blinkit offered the benefit of
accessing a vast geographic area, data-backed recommendations on how to enhance product
quality and packaging, and the ability to co-create products with Blinkit. For all of these
services, Blinkit charged a commission of 8-15% of revenues.

Local shops: Blinkit partnered with local mom-and-pop shops to exhibit and sell things from
their stores through Blinkit's internet platform. To sell through Blinkit, small businesses did
not need to invest in logistics or packaging. Blinkit also supplied last-mile delivery services
(within an 8-10 km radius) to these establishments, resulting in increased sales and earnings
for the store from adjacent neighbourhoods. Blinkit charged a commission of 12-15 percent
in exchange.

Warehouse employees are referred to as warehouse partners by Blinkit. These warehouse

partners would be in charge of picking, packing, and sorting orders placed by Blinkit
consumers. These partners received amenities such as meals, transportation, retirement
contributions, and health insurance in addition to a monthly income of Rs. 25,000.

Delivery partners are independent contractors who engage with Blinkit to pick up grocery
products ordered by clients using the Blinkit app and bring them to the customer's home.
They make these deliveries at their leisure, using their own vehicles. The "per packet model"
was utilised by Blinkit, which meant that a delivery partner's revenues were based on each
delivery performed. A delivery partner could earn up to Rs 30,000 (about $400) each month
with bonuses and other benefits. A minimum daily wage of 500 rupees (approximately $7)
would be guaranteed to a delivery partner. They were anticipated to deliver 8-10 minimum
orders, depending on the distance travelled and the weight of the things ordered.

The business concept of Blinkit is comparable to the commission-based income model. It

worked together with local business owners and merchants to deliver food and daily

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necessities in the surrounding towns and paid merchants a percentage on these orders. When
transactions are less than Rs 700, the merchant receives a commission ranging from 8% to
15%, and when orders are less than Rs 1000, the cost goes from 12% to 15%. If the order is
less than Rs 250, Blinkit will also charge the buyer a shipping cost.

COMPETITIOR ANALYSIS

Moms of millennials were heavily reliant on internet grocery delivery services as lockdowns
caused by Covid spread across the globe. Though practically everything has returned to
normal, we haven't truly given up on these practical (read: lazy) choices. When portals like
Zepto and Blinkit offered immediate delivery within 10 minutes, e-commerce was upgraded
to quick commerce. True, TEN.
Similar to you, there are instances when we need ingredients in our Test Kitchen immediately
for reviews and rely on these apps for prompt deliveries. It's safe to assume that these have
only served to benefit us. This information covers a wide range of topics, such as product
quality, customer service, and delivery time.
The quick commerce (qcommerce) market in India has expanded dramatically in recent
years. Since Bengaluru-based Dunzo launched the idea of hyperlocal qcommerce in 2015, the
segment, which began with pick-up and drop service, has advanced significantly.
With the increasing competition, below is the competitor analysis for various apps on certain
parameters.

1. Delivery Time

The discovery that customers value delivery speed the most will be a relief to
qcommerce firms who frequently worry about it. Which startup is the quickest, then,
it raises the question?

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 According to Clootrack, Zepto seems to be a clear winner when it comes to delivery
time. Zepto, which recently funded $200 Mn, bringing it close to the unicorn club,
received a Brand Equity score of 8.9 out of 10, over 2 points more than Dunzo, which
came in second.
With a Brand Equity score of 3.4, Blinkit, which promises the same delivery time as
Zepto and asserts to be nearly twice as quick as Dunzo, came in third place on the list.

Brand Equity Score: Delivery Time

2. Discounts Galore
The majority of the country's ecommerce platforms advertise deals and discounts to
entice clients, and qcommerce platforms have followed suit by providing discounts
for signing up and paying with multiple credit/debit cards, among other things.

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 Brand Equity Score: Offers & Discount
Dunzo was thought to give the finest savings, with a Brand Equity Score of 8.7, ahead
of Zepto (6.6) and Swiggy Instamart (3.2). With a Brand Equity Score of 1.5, Blinkit
was last.

3. Customer Care
Customer service is one of the most significant variables that affects consumer choice
in practically all industries, not just qcommerce. According to Clooktrack's analysis of
complaints from qcommerce customers, consumers detest poor customer service the
most, and they had the highest Consumer Disappointers Score of 7 overalls.

Consumer Disappointers Score (0 to 10)

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 According to the analysis, Blinkit and Swiggy Instamart were thought to have the
poorest delivery partner behaviour and customer service, respectively.
Although India's entire addressable market is $45 billion, there have been concerns
raised regarding the viability of the qcommerce business.

BLINKIT’S FUTURE

Blinkit has acquired $800 million in funding from significant investors like Zomato, Tiger
Global, and Softbank. After raising more than $120 million (approximately Rs. 9.10 billion)
as part of an ongoing fundraising push led by online meal delivery platform Zomato and
current investor Tiger Global Management, it recently achieved unicorn status, that is, it has a
valuation of $1 billion (about Rs. 75.88 billion). q-commerce business models, on the other
hand, not only run with razor-thin profit margins, but also address a relatively small segment
of potential client demand. While the company's current focus is on gaining customers and
changing behaviour, they may require significant funding in the long run, raising questions
about their long-term viability. Profitability is an issue due to aggressive pricing, large
discounts, free shipping, and big commissions.

Experts believe that organisations are focused on rapid commerce due to a shift in client
purchasing patterns and preferences. The key drivers of this expected increase in the rapid
commerce industry were a shift in customer behaviour from value-seeking to convenience-
seeking, resulting in weekly, small-sized purchases rather than bigger, monthly purchases.
This was attributable to increased adoption among convenience-seeking customers with

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unexpected ordering behaviour, as well as an increase in the affinity for indulgence purchases
among online and Gen-Z clients. It remains to be seen whether this business model can be
sustained in a developing nation like India, where unorganised retail accounts for more than
80% of sales.

DATA ANALYSIS

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 Reason for Choice
45
41
40
35 33
30
25
25 22
20
15 12
10
5
0
Product Quality Convenience Price Store Quality Variety
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 REFERENCES

https://whitman.syr.edu/snyder/2022/03/09/blinkit-grofers-pivot-to-quick-commerce-via-10-
minute-delivery/

https://indianexpress.com/article/explained/grofers-rebranded-itself-as-blinkit-7669940/

https://blinkit.com/blog/journey-of-an-order-from-the-grofers-warehouse-to-your-doorstep

https://ssin24.com/online-grocery-delivery-blinkit-business-model-2022/

https://blinkit.com/blog/delivery-fulfilment-998

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APPENDIX

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