Flipkart Minutes offering products at 10% lower prices than Blinkit: UBS Report

A new report by UBS analysts suggests that products on Flipkart Minutes, which is the newest player in the quick commerce sector, are priced about 10 percent lower than those on Blinkit, the current market leader.

Launched in August in select parts of Bengaluru, Flipkart Minutes is using introductory discounts—a strategy often employed by new entrants like Open Network for Digital Commerce (ONDC), Amazon, Ola, and Swiggy—to generate demand and build customer loyalty.

Companies adopting this strategy typically reduce discounts once they've established themselves and built a substantial user base. For Flipkart, entering the quick commerce sector with Minutes is now more feasible, given that the market has matured with enough players over the past three and a half years.

“Overall, Flipkart seems to be replicating the model that has now been proven successful, in terms of the look and feel of the app, the user interface and layout, product categories as well as the monetisation models, delivery fees, platform fees, etc.,” UBS said in its note.

Flipkart Minutes vs Blinkit

As the quick commerce industry becomes increasingly competitive, differentiated product pricing is crucial for newcomers like Flipkart Minutes to distinguish themselves from established players such as Blinkit, Swiggy Instamart, Zepto, and Big Basket, and to attract customers from these platforms, the report said.

“While the lower pricing could be an initial market entry strategy, we will keep an eye on prices as Flipkart expands this offering to more areas within Bangalore and to other cities. A 10% lower cost, which in effect could be in line with DMart prices, could be a good value proposition to attract customers,” it added.

For Flipkart, maintaining and offering these discounts will be more manageable due to its larger size and extensive experience in this space, which provides it with greater leverage in negotiations with brands.

During Zomato's Q4FY24 earnings call, Albinder Dhindsa, CEO of Blinkit said he doesn't believe in discounting. "...our focus is to build a valuable service that customers actually are willing to pay more for rather than trying to provide an inferior service and leaning on discounting to grow. And that will be our strategy going forward as well," the firm said.

Walmart-owned Flipkart was compelled to enter the quick commerce sector to fend off competition and protect its market position. Although Flipkart leads the e-commerce market, surpassing Amazon, Nykaa, Ajio, and others according to various industry estimates, it has yet to secure a significant share in the quick commerce space.

As of July, Blinkit led the quick commerce market with a 40-45 percent share, followed by Swiggy Instamart at 20-25 percent. Zepto ranked third with a 15-20 percent share, ahead of Big Basket (BB Now), which held a 10-15 percent market share, according to UBS.