Zomato’s shares fell 8.64% percent the day after Blinkit announced its plans to deliver printouts in 11 minutes.
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Printouts delivered in minutes
Blinkit had started off as a grocery delivery service.
It recently announced that it will begin a pilot to deliver print-outs.
Users would simply have to upload their documents on its app, and the company would deliver printouts to their homes in 11 minutes.
Tepid response
Although the idea isn’t a risky one, Zomato’s stock lost 3% within the first half hour on Friday.
The stock continued to fall through the day, ending up 8.64% lower by the time markets closed.
A Blinkit spokesperson said that it recently launched its print pilot in a few locations (including Sector 43 and Golf Course Road) in Gurgaon.
It will launch the same in more locations (including Delhi) in the near future provided it deems the service useful for its customers.
Pricing structure
It is charging Rs. 9 for black and white printouts and Rs. 19 for colour prints.
It will charge an additional Rs. 25 for delivering the printouts.
The stock markets had a cold response to the new initiative.
Zomato’s stock had recovered somewhat, but again crashed nearly 10% after Blinkit announced its printing service.
Investor sentiments
Investors’ skepticism is not unfounded- over the past few months, Blinkit has been struggling to find the sweet spot with hyperlocal deliveries.
It had rebranded itself with the promise of 10 minutes grocery delivery and also stopped serving locations where it couldn’t meet its delivery promise.
Over the last few months, it’s quietly taken off the 10 minutes promise from its website and marketing collaterals, and now simply claims to deliver things in “minutes”.
With this whole new vertical of printouts it has its investors worried.
Heavy risk
Small startups often try out different business models in trying to find product market fit, but Zomato’s is far from a startup now.
Despite having a market cap of over Rs. 50,000 crore it continues to make thousands of crores of losses.
It could eventually achieve success with home-delivered printouts but such experimentation, especially one largely unproven, appears to have spooked the stock markets.