Blinkit, a quick commerce startup formerly known as Grofers, has temporarily stopped operations in areas where it cannot service within 10 minutes, co-founder Albinder Dhindsa said in a Twitter post on Monday.

The decision comes on the back of the
company’s rebranding amid increased competition, with well-funded startups like Mumbai-based Zepto, Swiggy’s Instamart and Google-backed Dunzo all promising to deliver groceries and other essentials in 10-20 minutes.

“In the near term, this call will have a significant impact for our business size and for a large number of our customers,” according to the statement by Dhindsa. “We expect this to impact around 75,000 of the 200,000 daily customers we are serving. The company is ramping up fast, opening a new store every 4 hours and it is expecting to serve affected customers within 4 weeks.”

The ever-growing number of players in the quick commerce space include ride-hailing giant Ola and e-grocer BigBasket, which is working on its own quick commerce service called BBnow. Zepto’s USP is 10-minute delivery.

“We hope to be insanely consistent with our 10 minutes promise and apologise to our affected customers in advance,” he said.

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Last week, Dhindsa
told ET that the rebranding was done to indicate the company’s focus on quick commerce, which is beyond groceries. This could include anything which a customer would want in 10 minutes – from stationery, electronics like mobile chargers to even heaters during winters.

For the model to work, the companies operating in the space will have to find product market fit at a city level and even community level.

“Each city is different. Every community requires customisation. If you are making that level of customisation, you get product market fit and you will see demand being created,” he had said.

Blinkit is present in 12 cities, but Dhindsa said it will take the model to 100 cities by the end of March 2022.

It operates 250 dark stores and plans to expand to 550 such stores by the end of January. Dark stores are small warehouses located in the heart of a city through which orders can be delivered faster.

All quick commerce companies are figuring out unit economics and their path to profitability, and there is no dearth of capital flowing into the sector.

Swiggy plans to invest $700 million in its quick commerce service, Instamart, ET
reported earlier this month, citing cofounder Sriharsha Majety.

ET also reported last month that rival food delivery app Zomato was in talks to invest $500 million in Grofers, after having co-led a $120 million funding round in June that made the Gurugram-based company a unicorn.

Dhindsa declined to comment on the potential investment last week and said there have been no attempts at integrating Zomato’s app with Blinkit.

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