According to reports, Blinkit, Eternal’s rapid commerce division, will transition to an inventory-led strategy on September 1. After the transition, the business will buy products straight from vendors instead of just keeping them in stock.
Blinkit has already addressed its sellers to notify them of the switch to a new model, according to a media report. At the moment, sellers can post their goods on the marketplace model and pay Blinkit to store them in its warehouses.
In a different concept, Blinkit enables well-known companies and carefully chosen vendors to purchase goods in large quantities and resell them on the website. Blinkit will now be able to buy inventory and create product listings independently thanks to the model modification.
In its email to the merchants, Blinkit stated that July 30 is the deadline for opting into the new system. After this date, non-accepted vendors will not be permitted to post or stock new items.
Blinkit to Charge ‘Sellers Reverse Logistics Costs’
Additionally, Blinkit informed the sellers that their product would be refunded once reverse logistics expenses were subtracted if they were unwilling to make the switch. Since Eternal’s plan to modify its inventory model became apparent in April, the switch to the new model is not abrupt.
In May, Eternal accepted the plan to cap the foreign ownership at 49.5% in an attempt to “reinforce” its status as an Indian-owned-and-controlled corporation (IOCC). In addition to operating a marketplace, Eternal CFO Akshant Goyal stated during the Q4 earnings call that, as an IOCC, the company now has the opportunity to hold goods in the rapid commerce sector.
Whether Eternal was moving towards a hybrid 1P+3P model or 100% owned inventory (1P) at the time was not disclosed by the firm. According to Goyal, Eternal would have used less than INR 1,000 Cr of working capital for inventory ownership if Blinkit had held all of the inventory in FY25 (about 5% of FY25 NOV, or INR 22,000 Cr).
IOCC to Boost Business Operations of Blinkit
According to the foodtech giant, IOCC classification will aid in creating measures to preserve domestic control in the event that there isn’t a “distinguishable promoter group holding a substantial stake” in the business.
According to Eternal, the IOCC badge will provide them “more operational flexibility” and open up new prospects in the fast commerce sector. The company stated at the time that it would assist Blinkit in moving from the present marketplace model, which is dominated by third-party vendors, to an “inventory ownership” model.
By offering new and underserved categories like home décor, gourmet foods, toys, pooja items, and seasonal commodities, a shift to the inventory model will aid in its growth, it stated. Additionally, it stated that the inventory strategy will assist the business in increasing margins in both established FMCG categories and fragmented or unbranded sectors.
In April, Eternal said that this transition (to an inventory model) was in line with its objective to maximise the value mix, assortment, and quality for its clients in the rapid commerce industry.
Eternal will use its balance sheet wisely where it feels the strong RoCE (return on capital employed) potential and long-term value creation warrant the approach, even though this will make the business somewhat more working capital-intensive.
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