India’s quick commerce sector is expanding rapidly, with consumers increasingly ordering groceries, medicines and electronics for delivery within minutes. However, the companies that helped establish the industry are now facing mounting pressure from powerful new competitors.
Shares of Eternal, the parent company of Blinkit, have declined around 28 per cent from their record high in October, while Swiggy has fallen roughly 47 per cent from its September peak. Together, the two firms have seen more than $15 billion wiped off their market value as investors grow concerned about intensifying competition, according to a Bloomberg report.
The concern is not driven by weakening demand. Instead, investors are focused on the aggressive entry and expansion of Amazon and Walmart-owned Flipkart in the quick commerce segment, raising fears of a prolonged battle for market share.
Amazon and Flipkart Accelerate Expansion
Bloomberg reported that both Amazon and Flipkart are rapidly increasing the number of dark stores—small fulfilment centres located close to consumers that enable ultra-fast deliveries.
Amazon recently announced plans to expand its Amazon Now service from slightly over 15 cities and towns to more than 300 locations across India. Meanwhile, Flipkart Minutes has already established around 1,000 dark stores in 130 cities and intends to expand to approximately 1,500 stores across more than 180 cities in the coming months.
This aggressive growth strategy is expected to force existing players such as Blinkit and Swiggy to invest even more heavily in warehousing infrastructure, logistics capabilities and promotional offers to maintain their market positions.
Why Investors Are Concerned
While increased competition often benefits consumers through lower prices and better service, investors are worried about the impact on profitability.
Quick commerce requires significant ongoing expenditure on dark stores, delivery operations, staffing and customer incentives. As more companies compete for market share, profitability could remain elusive for a longer period.
Franklin Templeton fund manager Yi Ping Liao told Bloomberg that the key issue is not competition itself but how long the competitive pressure will persist. According to Liao, intense competition is currently suppressing near-term profitability, and the duration of that pressure remains the primary risk.
Zepto Also Faces Challenges
The increasingly crowded market is also affecting sentiment around Zepto’s planned initial public offering.
Bloomberg reported that Zepto is aiming to raise up to $1 billion through its IPO. However, investor caution has increased as larger rivals with substantial financial resources expand aggressively into the sector.
The report added that shares of Zepto in the unlisted market have fallen more than 32 per cent since February, reflecting concerns about both valuation levels and the company’s path to profitability.
Analysts Expect Competition to Continue
Industry analysts do not expect competitive pressures to ease in the near future.
According to Bloomberg, analysts at Macquarie anticipate sustained and intense competition for years rather than quarters, driven by players such as Amazon Now, Flipkart Minutes and omnichannel retailers including Reliance Retail. The brokerage has consequently reduced its target prices for both Eternal and Swiggy.
Reliance Retail is also strengthening its position through JioMart, leveraging a network of more than 3,100 stores spread across over 1,200 cities, the report noted.
What It Means for Consumers
Despite investor concerns, consumers are likely to remain the biggest beneficiaries of the ongoing competition.
An Emkay report cited by Bloomberg noted that quick commerce demand is expanding beyond major metropolitan centres into Tier-2 and Tier-3 cities, indicating growing acceptance of the model across the country. However, the brokerage also described the industry as being in a “land-grab phase,” where companies are prioritising market expansion over profitability.
As a result, customers can expect continued discounts, faster delivery services and broader product selections.
For investors, however, the outlook remains more complex. With Amazon, Flipkart, Blinkit, Swiggy, Zepto and Reliance all competing aggressively for dominance, the central question is no longer which company can grow the fastest, but which one can ultimately achieve sustainable profitability while maintaining that growth.
