Swiggy’s Instamart is introducing new wallet-credit and targeted fee-waiver features that suggest the company may be softening its stance on low-value users, as slowing order frequency and continued competitive pressure force a recalibration of its quality-growth strategy in quick commerce.
The new features allow users to convert delivery fees charged on orders below Rs 99 into wallet deposits redeemable on future purchases. Separately, Instamart has introduced delivery fee waivers on orders containing products from its private label brand Noice and categories including fresh dairy and vegetables. While the changes appear incremental, analysts said they indicate a shift in how the company is approaching customer acquisition and retention.
The moves come after Swiggy spent much of FY26 highlighting a strategy centred on improving unit economics, larger basket sizes and reducing dependence on low-average-order-value (AOV) users. On its March-quarter earnings call, CFO Rahul Bothra said the company had consciously reduced exposure to low-AOV customers, while Instamart CEO Amitesh Jha described the moderation in monthly transacting users (MTUs) as linked to the removal of infrequent users from the platform.
But operating metrics suggest that the strategy has also come with trade-offs.
Quality Growth Trade-off
Instamart’s ordering frequency stood at around 2.82 orders per transacting user per month in Q4FY26, below Blinkit’s 3.36 during the same period. Platform-wide ordering frequency across Swiggy’s businesses has declined for five consecutive quarters, falling from 4.22 in Q4FY25 to 4.01 in Q4FY26. MTUs grew 27% during the period, while order growth stood at 22%, suggesting newer users were ordering less frequently than existing cohorts. The company, which was earlier adding nearly 3 million users every quarter, added around 0.5 million in Q4FY26.
Analysts said the new wallet and category-specific delivery mechanisms suggest the company may be refining rather than abandoning its earlier approach.
Lock-In Economics
Instead of offering blanket fee waivers, the new structure appears designed to lower friction around small-ticket orders while preserving economics. Wallet credits potentially lock users into a repeat purchase cycle, while delivery waivers on categories such as dairy and vegetables target purchase segments where low order values are common but frequency is naturally high.
Daily essentials including dairy, staples and vegetables account for roughly 80% of quick-commerce volumes, making it difficult for platforms to entirely move away from smaller baskets, analysts said.
Competitive pressure meanwhile remains intense. While Instamart withdrew its broad no-fee campaign earlier this year, rivals continue to subsidise ordering behaviour in different forms. Flipkart Minutes charges no additional fees on orders above Rs 99, while Zepto and Amazon Now continue to offer lower transaction friction across multiple categories.
Discounting intensity has also remained elevated. Bernstein’s grocery tracker showed Zepto and Flipkart Minutes leading MRP discounting in recent months, while Instamart continued to operate in the middle of the pack.
Analysts said that the challenge for Swiggy now is whether it can sustain improving unit economics while participating in a market where customer habits continue to be shaped by frequency, convenience and transaction costs.