Blinkit pushes into smaller cities amid intensifying quick-commerce competition

Zomato is extending the reach of its quick commerce arm, Blinkit, beyond major metropolitan areas, signaling a strategic pivot toward underserved regional markets. During a post-earnings call last week, Chief Financial Officer Akshant Goyal declined to share precise figures but confirmed that a growing proportion of Blinkit’s new store openings are now concentrated in cities outside the country’s top eight. “Even in the top cities we are growing, but more and more share of new store openings is now going towards the smaller markets,” he said.

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The expansion comes as Blinkit navigates a fiercely competitive landscape, with established firms and newer entrants alike engaging in price wars and promotional campaigns to capture market share. Albinder Singh Dhindsa, Blinkit’s chief executive, acknowledged that while contribution margins and take rates remained stable on a quarter-over-quarter basis, anticipated gains in profitability have been undermined by industry-wide discounting and free delivery offers.

“The competition has been in different shapes and forms,” Dhindsa said, citing increased marketing outlays, aggressive pricing strategies, and rapid store rollouts by rivals.

Real estate has become another flashpoint in the quick commerce battle. Blinkit added approximately 300 stores over the past quarter, but the company now finds itself contending with rivals for premium locations, a dynamic that is driving up rental costs and causing delays in planned store launches.

In an effort to more accurately reflect its changing product portfolio, Blinkit has shifted from measuring Gross Order Value (GOV) to Net Order Value (NOV), which adjusts for discounts and pricing variances. Goyal noted that while the platform-wide difference between GOV and NOV stands at roughly 22 percent, the disparity is significantly higher in categories such as unbranded groceries and general merchandise, where the maximum retail price often diverges from the final sale price. “In some of the more unbranded categories, the difference can be much, much higher than 20%,” he said.

Looking ahead, the company is considering increasing its inventory holding period, particularly as it ventures into slower-moving but higher-value segments like electronics and home appliances. Blinkit currently holds inventory for about 15 to 16 days, but Dhindsa indicated that this could rise to between 20 and 25 days. He argued that keeping more inventory in-house could improve margins, offering better returns on capital compared to working with third-party sellers, who typically command lower commissions to offset inventory risk.

“There is a chance that the number of inventory days will go up,” Dhindsa said. “But even if you build the inventory, there is still a very healthy return on capital.”