The company says that quick commerce today is still concentrated in the top 15 to 20 cities and in a relatively narrow set of categories
While Eternal’s quick commerce arm Blinkit reported a marked improvement in profitability in the March quarter, the company has flagged a potential moderation in growth even as its base expands. However, the company also noted that the headroom for growth on geography, assortment and frequency is substantial.
Eternal Chief Executive Officer and Blinkit Founder Albinder Singh Dhindsa said that the quick commerce platform’s net order value (NOV) grew at a 104 per cent compound annual growth rate (CAGR) between fiscal year 2023 and 2023.
“Growth rates are now naturally moderating off a much larger base. Over the next three years, NOV growth CAGR should easily be north of 60 per cent. That translates to the business growing to more than four times its current scale in three years,” he said in the company’s quarterly shareholder letter.
He also added that quick commerce today is still concentrated in the top 15 to 20 cities and in a relatively narrow set of categories. While noting that assortment expansion, geographic coverage and demand densification are the building blocks of growth, he emphasised that the primary growth lever in the top eight cities is assortment.
“In the cities beyond the top eight, it is all three working simultaneously, geographic rollout, assortment build-out and the demand flywheel we have already seen play out in Delhi NCR,” he mentioned.
For Blinkit, Delhi NCR has roughly two times the store density of the next seven cities and eight times the density beyond the next seven, on a stores-per-serviceable-pin-code basis. The company expects the first quarter of the current financial year to be meaningfully stronger on a quarter-on-quarter basis.
“High competition can have adverse impact in certain periods of time, like the one we are going through now, where aggressive discounting is leading to poor-quality growth centred around select low-margin SKUs,” he added.
