New Delhi [India], March 20 (ANI): A HSBC Global Research report says that for Blinkit, it may not make sense to offer Super-Saver offer like Zepto’s.
If Blinkit were to introduce a program similar to Zepto’s Super-Saver, it could push its Average Order Value (AOV) up to Rs1,200, but its EBITDA margins would drop to 3.5 per cent from the current 6 per cent.
Currently, Blinkit has a higher AOV of around Rs670 and has positioned itself as a premium convenience-focused quick-commerce platform. Offering heavy discounts to increase order values could cannibalize its existing business and affect profitability.
This would lead to an absolute EBITDA of USD 1.1 billion by FY30, slightly lower than its current projection of USD 1.3 billion under the existing model.
Additionally, Blinkit has consistently been the most expensive quick-commerce platform in pricing checks, and it does not offer a loyalty program like Zepto Pass or Swiggy One. This suggests that Blinkit is focusing on being a “convenience app” rather than a “value app”, ensuring quick delivery and an expansive product range instead of discount-driven bulk purchases.
Zepto is making a move to capture a larger share of the grocery market by launching its Super-Saver program. Traditionally, Quick Commerce (QC) platforms have focused on two key aspects–assortment (product variety and availability) and convenience (fast delivery)–to serve customers who need quick grocery top-ups.
Zepto is now entering the value retail space, which has been dominated by modern retail (MR) outlets and mom-and-pop stores that cater to bulk or planned grocery purchases.
The Super-Saver program offers significant discounts on grocery purchases but comes with a minimum Average Order Value (AOV) of Rs999, which is more than double of Zepto’s current AOV.
The strategy behind this program is to encourage households to place larger, planned orders rather than just relying on Zepto for small, urgent grocery needs.
While profitability in percentage terms (EBITDA margins) is lower, the absolute EBITDA remains strong because the higher order value offsets the reduced margins.
In the long run, Zepto’s EBITDA margins for the Super-Saver program could be around 3 per cent, compared to its standard 6 per cent margin. However, since customers spend more per order, the absolute earnings per order remain similar or even higher.
This shift suggests that Zepto is aiming to increase its Total Addressable Market (TAM) by catering to both impulse-driven and planned grocery purchases, a segment that was previously dominated by supermarkets and local grocery chains.
Zepto’s move into the planned grocery market could reshape the quick-commerce industry by proving that quick-commerce (QC) can successfully target not just convenience-based top-ups but also bulk purchases.
If successful, this could lead to higher market penetration and revenue growth, making quick-commerce a viable alternative to supermarkets and wholesale grocery chains.
However, this strategy comes with risks–offering heavy discounts and focusing on bulk purchases could reduce margins, and it remains to be seen whether customers will shift their planned grocery shopping habits to quick-commerce platforms in the long run. (ANI)
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