Business
Most Blinkit Stores Have Reopened Following Shutdown Due to Wage Protests, According to Zomato
Zomato reported that the disruptions had a revenue impact of less than 1%.
Zomato, an Indian food delivery company, said on Wednesday that most of its grocery unit Blinkit’s stores had reopened after being closed due to wage protests, sending its shares up as much as 5%.
The disruptions had a less than 1% impact on Zomato’s revenue, according to a regulatory filing by the Gurgaon-based company. In the third quarter, Blinkit, which Zomato purchased last year for $550 million (roughly Rs. 4,506 crore), accounted for 12.7 percent of Zomato’s total revenue.
Following changes to the payout structure for Blinkit delivery partners, Zomato said it had temporarily closed some of its locations to ensure the safety of both its in-store staff and its delivery partners.
About 50 of Blinkit’s 400 stores in India were closed on Friday due to employee demands for higher pay; these locations were mostly in and around New Delhi.
In order to “address the needs of delivery partners, improve customer experience, and reduce cancellation/order rejection frauds by few delivery partners in the system,” Zomato said on Wednesday, the payment system changes were made.
In India’s rapidly expanding grocery market, Blinkit faces competition from other significant delivery companies like top retailer Reliance-backed Dunzo, Tata’s BigBasket, and SoftBank-backed Swiggy.
On Monday, approximately 50 Blinkit stores were closed as bike riders protested for higher wages. In an email, Zomato stated that it had introduced a new structure for riders that compensates them based on their effort and that it was working with them to reopen the closed stores.
Zomato purchased Blinkit for $550 million (roughly Rs. 4,506 crore) last year to capitalise on the trend of “quick commerce,” which delivers goods within minutes to those in need of supplies or simply on impulse.
Blinkit has approximately 400 stores in India, 50 of which were closed on Friday, mostly in and around New Delhi, according to a source with direct knowledge.
Hundreds of Blinkit bike riders were seen in social media videos chanting and holding signs in protest of the introduction of a payment structure that they claim will lower their per-order earnings. On Friday, the Blinkit app indicated that a number of its stores in New Delhi were “temporarily unavailable”.
A security guard at one Blinkit location in Noida told Reuters that the location was closed and that no delivery drivers had picked up orders since April 11.
