blinkit is closing the warehouse again, this time as part of the integration of its operations with the food delivery major, which is in the process of acquiring the Gurgaon-based Accelerated Commerce startup.

Blinkit is expected to close most of its backend fulfillment warehouse and merge them with Zomato’s business-to-business restaurant supply business hyperpureTwo people with knowledge of the matter told ET.

Earlier in March, the company had stalled its business and closed many. dark stores, only to open new ones so that it can fulfill its 10-minute delivery promise. The move was seen as an attempt by Blinkit to compete better against Mumbai-based Zipto, which was aggressively promoting its 10-minute delivery promise at the time.

This time, however, there is an air of uncertainty for the employees as many Blinkit employees are being shifted to Zomato Hyperpure.

“Any M&A deal is likely to result in layoffs and even though the company has not said anything about layoffs, duplications are likely to emerge,” said one of the employees quoted above.

The first step towards integrating Blinkit’s operations with Zomato’s began in January, even as the controversial and protracted deal to acquire Blinkit for Rs 4,447 crore of the food delivery platform was a customary one expected by August. Awaiting approval of shareholder and stock exchange.

vertical integration

While the two companies have spoken a lot about using the same delivery fleet, the immediate priority is to integrate the backend, the people cited above said.

“This helps reduce costs significantly for Blinkit as the combined entity can not only reduce procurement costs due to economies of scale but also share resources such as backend fleet and manpower,” said one of them. Told.

Fulfillment centers are large warehouses that provide supplies to dark stores in cities, and Blinkit usually has a fulfillment center in each city.

Both sources told ET that Blinkit started integration with Hyperpure in Bengaluru and Chennai in hopes of signing deals in January by buying fresh fruits and vegetables from the business-to-business vertical. As of now, integration with HyperPure is underway or has already been completed in Mumbai, Jaipur, Hyderabad, Pune, Ahmedabad and Kolkata, he added.

Both Blinkit and Zomato did not respond to queries sent by ET regarding integration with HyperPure and its implications till press time on Sunday.

In Delhi-NCR, Blinkit’s largest market, which accounted for 30-40% of total sales in March, three hyperpure fulfillment facilities are being set up that will cater to the needs of both Blinkit and Zomato. One of the sources said that it will take another 3-4 months for the infection to spread in the national capital.

Blinkit currently buys fruits and vegetables from Hyperpure, but plans to include perishable items like bread and dairy products in its inventory and trials for the same are slated to begin within a month, sources said. Blinkit will continue to buy packaged foods and groceries separately as they fall out of Hyperpure’s categories.

The integration of Blinkit’s operations with HyperPure is important as accelerated commerce companies are cutting costs as the funding environment turns bleak.

ET reported on June 7 That companies have kept their 10-minute delivery promise and are trying a variety of ways to cut costs, such as clubbing multiple orders. With vertical integration, companies can earn better margins.

Supported by Dunzo

Retail and ET reported that Swiggy is also looking to buy the cash and carry business of Metro Retail.

“Most startup players are challenged for revenue and profitability, and they are clearly being opportunistic through acquisitions,” said Ashutosh Sharma, vice president and research director at research and advisory firm Forrester. “The integration with HyperPure is one of the ways for the company (Blinkit) to improve margins.”

New Beginning?

Apart from integration with HyperPure, both the companies are working on moving to a new office in Gurgaon in the coming months, one of the sources said.

ET had reported on February 18 Zomato has leased 300,000 sq ft of office space at Emaar India’s Downtown Capital Tower in Gurgaon in one of the largest leasing deals in the National Capital Region (NCR) in recent times.

Blinkit and Zomato are also working on integrating their technology – both front end and back end.

“At the backend, there are tools like POS (Point-of-Sale) machines to scan products for inventory management, and it all runs on software developed by Blinkit, this has to be converted into software made by Zomato,” said a he said. from the sources cited above.

Blinkit has always had big ambitions – it seeks to penetrate the wider ecommerce space by delivering products outside the accelerated commerce space. The company’s town hall is called “Apples-to-Apples” internally, reflecting the company’s ambition to eventually deliver everything from apples, fruit to Apple products like the iPhone.

The company has made several senior-level exits over the past year, including one of co-founder Saurabh Kumar. He has started another company called Warply, which has similar ambitions as Blinkit. It seeks to deliver everything an ecommerce platform has to offer in 30 minutes. ET had reported on July 11 that the company has promoted long-time executive Rishi Arora to the co-founder level.

However, company executives said that Blinkit is still a long way from achieving its ‘apples-to-apples’ dream.