Zomato-Blinkit Deal: Zomato Chief Mentions Dark Store in Letter to Shareholders; What is It?


Food delivery aggregator Zomato has in a Rs 4447-crore deal acquired 33,000 shares of grocery delivery platform Blinkit in an all-stock deal.  The company in a regulatory filing said that its board had approved to acquire the quick delivery ecommerce platform, earlier known as Grofers. Zomato said that this acquisition is in line with Zomato’s strategy of investing in the quick commerce business. Zomato already hold one equity share and 3,248 preference shares, or 9 per cent stake, in Blinkit (formerly known as Grofers) currently.

“The board of directors of Zomato Limited…at its meeting held today i.e., June 24, 2022 inter-alia, has considered and approved the…acquisition of up to 33,018 equity shares of Blink Commerce Private Limited (formerly known as Grofers India Private Limited) for a total purchase consideration of Rs 444 7,4 7,84,078 at a price of Rs 13,46,986.01 per equity share by issuance and allotment of up to 62,85,30,012 fully paid-up equity shares of the company having a face value of Rs 1 each at a price of Rs 70.76 (Indian Rupees Seventy and Seventy Six Paisa Only) per equity share,” Zomato said in the BSE filing dated June 24, Friday.

In a letter to shareholders on the day, Zomato founder Deepinder Goyal and the company’s chief financial officer Akshant Goyal spoke about Blinkit’s dark stores. “Blinkit has visibility into inventory owned by third party distributors and retailers that stock 4,000 SKUs across a variety of product categories, in a network of warehouses and distributed dark stores. Customers can view and order these products on the Blinkit app. Blinkit also facilitates last-mile delivery of products to customers from the dark stores. The delivery radius for a dark store is typically less than 2 kms, which allows for quick delivery of products,” said Akshant Goyal while giving an overview of Blinkit.

“Blinkit’s proprietary tech platform, scale of business, relationships with third party brands and sellers, and the warehouse and dark store network made it a compelling choice for us to buy vs building it in-house,” he added.

What are Dark Stores?

A dark store is a term used for referring to a retail distribution warehouse or centre which is specifically dedicated to those who shop online. A dark store acts as a lifeline of quick commerce platforms like Blinkit and Swiggy Instamart, who promise to deliver groceries to customers within 15 to 20 minutes. Several employees are recruited in these dark stores, which are typically situated within close radius from where a customer orders. There are no customers in this micro-fulfillment center, and the staff packs and delivers the items ordered online at the doorstep of the customer. The close proximity of dark stores to that of the customers’ locations is what helps in quick deliveries of items.

How Many Dark Stores Does Blinkit Have?

As of May 2022, Blinkit has 400 dark stores across India, Akshant Goyal said in his letter to shareholders. “Blinkit has also shut down a number of unviable dark stores, which were not scaling. This has also brought the losses down. The dark store count has come down to about 400 in May 2022, as compared to 450-plus in January 2022,” he said. He also said that depending upon the profitability, Zomato will expand the number of dark stores after the Zomato Blinkit deal.

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