With its bottomline under pressure, Blinkit shifts to variable commission rates for sellers

Zomato-owned quick commerce platform Blinkit has changed the way it charges commission from brands and sellers on its marketplace in some categories, moving from a fixed rate to a variable composition, people in the know told ET.

This comes at a time when Blinkit’s profitability has been hit as a result of aggressive expansion and heightened competition in the quick commerce sector. According to executives, the revision in the rate structure could help the Gurgaon-based firm improve its take rates (the percentage of revenue earned by a company from its gross order value).

Under the older commission system, Blinkit had a fixed rate for every category. This commission ranged between 3% and 18%, depending on the category. However, in the new system, rates will be charged based on the selling price of the item, even within the same category.


For example, products with a selling price less than Rs 500 will attract a 2% commission, while those priced between Rs 500 and Rs 700 will have a commission of 6%. Similarly, at the top end of the range, products priced above Rs 1,200 will have a commission rate of 18%.

To be sure, these are only the marketplace commissions. In addition, brands and sellers pay other fees for storage, warehousing and deliveries, taking the total outgo to quick commerce firms to around 30-35% of their selling prices. Also, these terms vary depending on the size of a brand.

Also Read: ETtech Q&A | Replicating Blinkit’s quick commerce moves won’t ensure success: CEO Albinder Dhindsa

The change in the commission rate structure was communicated by Blinkit to sellers and brands, saying it will be effective from March 13. ET has seen a copy of the email.

Email queries sent to Blinkit did not elicit a response at the time of publishing.

Take rate compulsions

“The product and category mix on the marketplace has changed drastically since the fixed commission rates were introduced. Now, there are are thousands of SKUs (stock-keeping units) with higher ASPs (average selling prices) but because of how the rate for a particular category was decided, Blinkit’s take rates didn’t improve even if AOV (average order value) increased,” a senior executive in the know explained.

According to a report by Morgan Stanley, Blinkit had reported a take rate of 17.9% for the October-December quarter, down 91 basis points sequentially and 24 basis points year-on-year.

For the same period, Blinkit’s listed rival Swiggy’s Instamart had reported a take rate of 15.4%.

Responding to a question over the fall in take rate during a post-earnings analyst call on January 20, Blinkit CEO Albinder Dhindsa had said, “...the take (rate) difference that you see every quarter-on-quarter is usually just a mix of the product mix itself. OND (October-November-December) is typically a quarter where we also see more sales of electronics products, general merchandise and some of the other categories, where percentagewise take rates are lower, but the overall revenue profile is healthier. So, that's usually the delta that you see”.

The quick commerce company—India’s largest—also saw an impact from rising competition on its take rates given that it could not tweak delivery fees as planned.

“The other component of the take rate is the delivery charges that we charge from customers. We have seen a slight decline there because of the market and the competition being where they are on the delivery fee. The decline is not significant, but yes, it has partly contributed to the decline in take rate that you see,” Zomato CFO Akshant Goyal had said during the call.

Also Read: Spurring food delivery growth, keeping discipline intact for Blinkit key: Zomato CEO Deepinder Goyal