…Researched and contributed by Henry George.
Indian food delivery company Zomato has announced that most of its Blinkit grocery stores have resumed operations after being shut down due to wage protests.
The disruptions had a minimal impact on Zomato’s revenue, according to the company’s regulatory filing.
Last year, Zomato acquired Blinkit for $550 million, which accounted for 12.7% of Zomato’s total revenue in the third quarter.
However, the changes made to the payout structure of Blinkit’s delivery partners resulted in protests by employees who demanded better wages.
Zomato’s Actions in Response to the Protests
Zomato stated that it had closed some stores to ensure the safety of its employees and delivery partners after introducing changes to the payout structure.
The company had made these changes to “address the needs of delivery partners, improve customer experience, and reduce order rejection frauds by a few delivery partners in the system.”
Blinkit has around 400 stores in India, 50 of which were shut, mostly in and around New Delhi, on Friday.
Zomato assured the public that it had introduced a new structure for riders, which compensates them based on their effort and was engaging with them to reopen the stores.
Impact on Zomato’s Business
Although Blinkit had a small impact on Zomato’s revenue, it is still a significant player in India’s fast-growing grocery market.
Blinkit competes with other major delivery firms, including Reliance-backed Dunzo, Tata’s BigBasket, and SoftBank-backed Swiggy.
To capitalize on the trend for “quick commerce” that delivers goods within minutes, Zomato bought Blinkit for $550 million last year.
The Protests and Demands of the Employees
On Friday, approximately 50 Blinkit stores were closed as bike riders stopped work to demand better wages. V
ideos on social media showed hundreds of Blinkit bike riders protesting and raising slogans against the new payment structure that they claim will reduce their per-order earnings.
The Blinkit app on Friday showed that several of its stores were “temporarily unavailable” in New Delhi.
According to a source with direct knowledge, Blinkit has around 400 stores in India, of which 50 were shut mostly in and around New Delhi on Friday.
At one Blinkit store in Noida, a security staff officer confirmed that no delivery riders had picked up orders since April 11, and the store was shut.
Conclusion
Zomato’s announcement that its Blinkit grocery stores have resumed operations is welcome news for customers and investors alike.
Although the protests had a minor impact on the company’s revenue, Zomato needs to address the concerns of its delivery partners to avoid future disruptions.
It remains to be seen whether the changes made to the payout structure will satisfy the employees or whether further protests will occur in the future.
The rapid growth of India’s grocery delivery market presents many opportunities for companies such as Zomato, but they must ensure they balance profitability with fair wages and working conditions for their employees.