Blinkit Shifts to Variable Commission Model to Boost Profitability
Zomato-owned quick commerce platform Blinkit is set to implement a significant change in its revenue model, moving from fixed commission rates to a variable structure based on product selling prices. This strategic pivot, scheduled to take effect from March 13, aims to improve the company's take rate amid growing competition in India's rapidly expanding quick commerce sector.
New Commission Structure Details
Under the current system, Blinkit charges sellers and brands a fixed commission ranging from 3% to 18% depending on product categories. The new variable model will adjust commission rates based on the selling price of items, potentially allowing the company to optimize revenue across different price points and product types.
This commission restructuring comes as a strategic response to financial pressures, with Blinkit reporting an adjusted EBITDA loss of ₹103 crore in Q3 FY25, a significant increase from the ₹8 crore loss recorded in the previous quarter.
Industry-Wide Commission Adjustments
Blinkit isn't alone in revising its commission structure. Competitor Swiggy Instamart is reportedly planning to increase its commission rate from 15% to approximately 20-22%, indicating an industry-wide movement toward improved unit economics in the quick commerce space.
These adjustments reflect the growing need for sustainable business models in a sector characterized by:
- High operational costs associated with dark store networks
- Intense competitive pressure from established and emerging players
- Rising customer expectations for rapid delivery times
- The necessity to balance growth with path to profitability
Aggressive Expansion Amid Competition
The commission restructuring comes during a period of aggressive expansion for Blinkit. The company added 216 new dark stores in the December quarter of FY25, bringing its total to 1,007 locations nationwide. Blinkit has announced ambitious plans to nearly double this network to 2,000 dark stores by Q3 FY26.
This expansion occurs against the backdrop of intensifying competition in India's quick commerce market:
- Swiggy Instamart operated 705 dark stores as of December 31, 2024, with a presence in 76 cities
- Zepto doubled its dark store count to 700 in 2024, up from 350 the previous year
- Established e-commerce giants like Flipkart, Amazon, and BigBasket have pivoted toward quick commerce models
- New specialized entrants such as Blip, Farmako, and Swish are targeting specific product categories
Quick Commerce Market Growth
The strategic changes in commission structures reflect the significant growth potential in India's quick commerce sector. Together, Blinkit, Instamart, and Zepto recorded combined sales approaching $1 billion in FY24, demonstrating substantial consumer adoption of rapid delivery services.
According to industry analysts, the quick commerce market is witnessing an aggressive "land grab" as players compete for market share and establish presence across urban centers. This has led to substantial investments in infrastructure and high cash burn rates across the industry.
Recent Industry Controversy
The competitive intensity in the sector recently sparked controversy when Zomato co-founder publicly suggested that Zepto alone accounted for half of the estimated ₹5,000 crore quarterly burn witnessed by the quick commerce ecosystem. Zepto's leadership promptly refuted these claims as "verifiably untrue," highlighting the tensions in this high-stakes market.
As quick commerce platforms adjust their revenue models and expand operations, industry observers anticipate further consolidation and evolving business strategies as companies balance growth ambitions with the imperative of sustainable economics.
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