Blinkit sees no compelling case for expanding private labels, says Dhindsa
Albinder Dhindsa, CEO of Eternal, voiced skepticism regarding the potential for private labels to enhance profit margins. He emphasised that effective brand development mandates considerable investment in both marketing and product development, areas where Blinkit falls short.
In Eternal's September quarter earnings, CEO Albinder Dhindsa stated that the company does not see private labels providing a compelling case for margin improvement or driving additional demand. Dhindsa explained that creating a differentiated private label requires building a brand, investing in product development, quality control, inventory management, and marketing, which are capabilities Blinkit lacks.
However, Dhindsa noted that deeper supply-chain control can create value, using the example of fruits and vegetables, where Blinkit already benefits from sourcing and quality control through Hyperpure. This control allows Blinkit to earn advertising revenue from brands without needing its own consumer-facing brand. The company currently operates a private label brand called Whole Farm, focusing on groceries and staple pantry items.
Despite this, Dhindsa emphasized that Blinkit has not expanded Whole Farm beyond groceries, while rival Instamart has scaled its private label brand Noice, which now appears in one out of every ten orders on the Instamart platform.
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