Stocks of Blinkit, Instamart-Style Players Soar-Is Quick-Commerce Finally Delivering Profits?

India’s top e-commerce stocks have outperformed broader local indices and regional peers over the past month, as growing demand in quick-commerce boosts confidence in their ability to stay ahead of competitors and improve profits, according to a report by Bloomberg.

Swiggy Ltd.’s shares jumped 20% last month, outpacing the NSE Nifty 100 Index. Eternal Ltd., (formerly Zomato Limited) also gained 11% during the same period. This strong performance in India’s fast-growing quick-commerce space — which delivers everyday essentials within minutes — stands in contrast to losses faced by Chinese delivery companies amid fierce price wars, claimed Bloomberg in its report. 

Despite new players like Amazon and Walmart-owned Flipkart entering the market, analysts believe companies like Swiggy, Eternal, and unlisted Zepto are well-placed to hold their lead, thanks to their formidable supply chains and early entry into the space.

“Established players have shown they can manage delivery costs well, especially in how they recruit and use delivery workers,” said Nirav Karkera, Head of Research at Fisdom told Bloomberg. He also stated, “New players will still need to show they can do this in a way that’s sustainable.”

India’s quick-commerce sector is reshaping online shopping. Bloomberg Intelligence estimates the market could grow to $100 billion by 2030, driven by demand for fast delivery of groceries and personal care items.

At present, Blinkit (owned by Eternal), Swiggy’s Instamart, and Zepto control about 88% of India’s quick-commerce market, according to JM Financial. Blinkit has led the market since it was bought by Eternal in 2022, which also owns Zomato. 

These companies have invested heavily in building warehouses and dark stores to serve more cities. While this has hurt profit margins, it has helped them grow quickly. Analysts say the phase of high spending may be easing for the early movers, giving them more room to focus on profitability. At the same time, newer players will still need to invest heavily to catch up.

In contrast, food delivery firms in China are still struggling. Meituan and JD.com have together lost more than $70 billion in market value since March due to stiff competition.

India has its own challenges. Zepto’s rapid growth has taken market share away from Instamart, and Swiggy is still not profitable. However, analyst sentiment has improved, with more buy ratings on Swiggy shares than ever since its late 2024 IPO.

“The incumbents are still growing their user base and store networks, even with fewer discounts and added delivery fees,” said Aditya Soman, analyst at CLSA told Bloomberg, adding, “We remain optimistic about the quick-commerce opportunity. There’s space for both the current leaders and a few new players.”