E-business case study on Grofers transformation to
Blink it.
Business overview
Grofers is an Indian e-commerce company founded in 2013 by Albinder
Dhindsa and Saurabh Kumar. Headquartered in Gurugram, India, Grofers
operates in the online grocery delivery space, offering a wide range of
products, including groceries, fruits, vegetables, and household essentials,
with same-day or next-day delivery options.
E- business model
It uses Hyperlocal E-commerce model, more specifically online to
offline (O2O) model
Grofers operates a hyperlocal delivery model, partnering with local stores
and suppliers to source products. Customers place orders through the
website or mobile app, and orders are processed and delivered within the
same day or next day. Grofers manages inventory, logistics, and delivery,
offering various payment options. The company generates revenue through
commission-based sales and delivery fees.
Challenges :-
Challenge 1: Intense Competition
- The Indian e-grocery market became increasingly crowded, with established
players like Big Basket, Amazon, and Flipkart dominating the space.
- New entrants and local players also emerged, further fragmenting the
market.
- Grofers struggled to differentiate itself and maintain market share amidst
intense competition.
Challenge 2: High Operational Costs
- Grofers’ business model relied heavily on same-day or next-day deliveries,
resulting in high logistics and operational costs.
- The company had to invest heavily in its delivery infrastructure, including
vehicles, personnel, and technology.
- Managing a large network of delivery personnel and ensuring timely
deliveries added to the operational complexities.
Challenge 3: Low Customer Retention
- Despite offering discounts and promotions, Grofers struggled to retain
customers due to the competitive landscape.
- Customers had multiple options to choose from, and loyalty was hard to
maintain.
- Grofers needed to find ways to differentiate its services and build strong
customer relationships to improve retention.
Solution to overcome the challenge:-
Transformation to Blinkit
In 2021, Grofers transformed into Blinkit, a quick-commerce platform
designed to deliver essentials within 10-15 minutes. Blinkit focuses on a
smaller, curated selection of products, including groceries, snacks, and
personal care items.
Blinkit operates through a network of dark stores, which are small, localized
warehouses that store products. When a customer places an order, Blinkit’s
algorithm assigns the order to the nearest dark store. The order is then
fulfilled and delivered to the customer within 10-15 minutes.
Key points:
1. Shift to quick-commerce: Blinkit’ focus on rapid deliveries reduced
logistical complexities and costs.
2. Simplified product offerings: By limiting the product range, Blinkit
reduced inventory management costs and improved supply chain efficiency.
3. Increased customer retention: Blinkit’s convenient, fast delivery model
improved customer satisfaction and retention.
Outcome:
The transformation to Blinkit has shown promising results:
1. Improved operational efficiency: Blinkit’s simplified business model
reduced operational costs, enabling the company to achieve greater
efficiency.
2. Increased customer satisfaction: Rapid deliveries and a curated
product selection improved customer satisfaction, leading to increased
loyalty and retention.
3. Enhanced competitiveness: Blinkit’s unique value proposition
differentiated it from competitors in the Indian e-grocery market, enabling
the company to establish a strong market presence.
Alternative Strategies that could have been used :
While transforming into Blinkit was a successful move for Grofers, there are
alternative strategies the company could have explored:
1. Partnerships and collaborations: Grofers could have partnered with
other companies or startups to expand its offerings, improve logistics, or
enhance customer experience.
2. Investing in technology: Grofers could have invested more in
technology, such as AI-powered chatbots, augmented reality features, or
data analytics tools, to improve operational efficiency and customer
engagement.
3. Conduct more extensive market research: Grofers could have
conducted more thorough market research to better understand customer
needs, preferences, and pain points, potentially leading to more targeted and
effective solutions
Lessons learnt :
1. Adaptability is key: Grofers’ ability to pivot and adapt to changing
market conditions demonstrates the importance of flexibility in business,
allowing companies to stay competitive and relevant.
2. Focus on customer needs: Blinkit’s success highlights the importance of
prioritizing customer needs and preferences, understanding their pain points,
and delivering solutions that meet their expectations.
3. Simplification can lead to efficiency: By simplifying its business model
and focusing on quick-commerce, Blinkit was able to reduce operational
costs and improve efficiency, streamlining its processes and enhancing
overall performance.
4. Innovation requires calculated risk-taking: Grofers’ transformation to
Blinkit involved taking calculated risks, which ultimately paid off,
demonstrating that innovation often requires stepping out of one’s comfort
zone and embracing uncertainty.
