Race to Deliver Fast Intensifies: Quick Commerce Firms Burning ₹1,500 Crore Monthly
Race to Deliver Fast : The battle for dominance in India’s quick commerce sector is heating up, with companies burning an astonishing ₹1,300-1,500 crore per month to stay ahead. This intense cash burn, more than doubling in just a few months, highlights the cutthroat competition among major players like Blinkit (owned by Zomato), Zepto, and Swiggy Instamart.
Mounting Pressure on Quick Commerce Players
As consumer demand for 10-minute deliveries surges in urban India, companies are aggressively spending on marketing, discounts, and operations to capture market share. However, the pressure is mounting on listed firms like Zomato and Swiggy, whose stock prices have taken a hit due to ongoing losses and investor concerns over long-term profitability.
Zepto, a relatively new entrant, has been particularly aggressive, contributing significantly to the industry’s skyrocketing burn rate. According to a BofA Research report, Zepto’s monthly active users surged to 43 million in January, surpassing Blinkit’s 39 million.
Adding to the competitive frenzy, other major players such as BigBasket, Flipkart Minutes, and Amazon Now are also ramping up their quick commerce efforts, further intensifying the cash burn across the industry.
Financial Impact: A Sector Struggling for Profitability
Despite rapid growth in users, the financials of quick commerce firms remain under immense pressure. Swiggy, for example, reported a ₹799 crore loss for the October-December quarter, while Blinkit posted an adjusted EBITDA loss of ₹103 crore. The growing losses have significantly impacted investor confidence, with Zomato’s stock dropping 22% and Swiggy’s by 34% year-to-date, collectively erasing over $11 billion in market value.
| Company | Adjusted EBITDA Loss (Q3 FY25) | Stock Price Change (YTD) |
|---|---|---|
| Swiggy Instamart | ₹578 crore | -34% |
| Blinkit | ₹103 crore | -22% |
| Zomato | ₹8 crore (prev. quarter) | -22% |
Funding and IPO Impact
To fuel their rapid expansion, Blinkit, Zepto, and Swiggy Instamart have raised nearly $3 billion collectively. However, with Zepto planning an IPO this year, analysts expect a potential reduction in cash burn as the company prepares for public scrutiny.
A senior industry executive noted,
“As Zepto gets closer to its IPO filing, it will have to reduce its burn rate. The knock-on effect on Zomato and Swiggy’s stock will also play a role in their strategies.”
Challenges in Quick Commerce: High Costs & Low Margins
One of the key reasons for the enormous cash burn is the high cost of operating dark stores (micro-warehouses) and acquiring new customers. According to UBS Global Research, increasing dark store density significantly adds to expenses, making profitability a distant goal.
Furthermore, while the top three players have anywhere between $1 billion and $2 billion in cash reserves, smaller players are also well-funded, ensuring the price war continues.
Investor Sentiment: When Will the Burn Stop?
The current phase of heavy spending is reminiscent of the 2016-2017 ecommerce wars, when companies like Amazon, Flipkart, Snapdeal, and Paytm Mall were burning $1.5-2 billion annually on discounts and cashbacks. However, the key difference now is that investor scrutiny is much higher.
Satish Meena, an e-commerce consultant, commented:
“Quick commerce companies are focusing on convenience, not just discounts. Unlike traditional e-commerce, where deep discounts were the primary attraction, here, the key selling point is speed.”
Looking Ahead: The Future of Quick Commerce
Industry experts believe that Q1 FY26 could be a turning point, especially if Zepto’s IPO forces the sector to curb its aggressive spending. However, with Amazon and Flipkart also expanding their quick commerce footprint, the competition isn’t expected to slow down anytime soon.
As the sector evolves, companies will need to balance growth with profitability, optimizing their supply chains and improving unit economics. While the race to deliver faster continues, only time will tell which players can sustain the burn and emerge as long-term winners in India’s booming quick commerce market.
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Disclaimer: This blog post is for informational purposes only and should not be considered financial advice. Investors should conduct thorough research and consult with a qualified financial advisor before making any investment decisions.