Quick commerce platforms have come to be the ultimate game-changer in India’s busy cities, where time equals money and convenience rules, catering to the fast-paced, hectic lifestyles of urban consumers. The front runners in this market are Zomato-owned Blinkit, Zepto, and Swiggy Instamart, leveraging technology, dense networks of dark stores, and hyperlocal logistics to meet growing demand.
Others in the fray to capture market share are Flipkart Minutes, Bigbasket’s BB Now, JioMart, and PhonePe’s Pincode. Amazon too is experimenting with the model. Vertical platforms such as Nykaa (beauty products), Licious (meat delivery), Ola Dash (food) new startup Zing (food) are also exploring the quick commerce route.
However, behind the convenience lies fierce competition, massive investments, and innovation, making quick commerce one of the most exciting and dynamic sectors in India today. On the face of it, the market seems to be large enough for multiple players to sustain but would that remain the status quo in the long term or would it be a race to consolidation in this high-stakes market?
Race to the top
India’s demographic advantage and internet penetration make it one of the most attractive markets for quick commerce. The size of the market—combined with the increasing urbanization and a young, tech-savvy population—gives quick commerce players ample room to grow.
A report by advisory firm Chryseum estimates that India’s quick commerce market will grow from around $3.34 billion in 2024 to $9.95 billion by 2029, with growth expected at around 4.5 per cent. In addition, India’s urban population is also estimated to increase 40 per cent by 2030 as per the World Economic Forum, which would attract more people to its quick commerce services.
While the market has room for quite a few players, differentiation becomes critical as competition heightens. Top quick commerce companies are expanding their market share by focusing on speed or logistics with larger numbers of dark stores (brick-and-mortar distribution outlet), depth and variety of their product offerings, ease of use, quick returns, etc.
Over time, however, as customer preference centres around one or two or maximum three players, consolidation might happen as we have witnessed in the past in other sectors as well where currently, around two players have consolidated the market. For instance, Flipkart and Amazon in e-commerce, Ola and Uber in ride-hailing, Paytm and PhonePe in digital payments, Zomato and Swiggy in food delivery, etc.
There are evident economies of scale here. The large players in these markets had more financial muscle and operational efficiency, which factored into the domination or consolidation of these markets.
“Sensing a large opportunity, several well-funded players have already entered the fray that can lead to faster market expansion. On the flip side though, competitive intensity and cash burn for the industry are likely to stay high. We, therefore, believe consolidation is inevitable over the next few years and see food-techs/scheduled e-grocery players better placed to survive the likely carnage,” said a JM Financial report.
As in any high-capital and logistics-intensive industry, quick commerce needs economies of scale to achieve better and faster growth. For this purpose, quick commerce players are building logistics networks for fast delivery of products and scaling up. This requires a significant investment in technology, infrastructure, and warehousing. Larger players can then use their scale to cut down on costs, making it challenging for smaller players to survive.
This means that larger supply chains, better inventory management, and larger delivery fleets translate into lower unit costs, allowing for better prices or faster service. This can lead to consolidation as the smaller players either have to partner with the larger players or leave the market.
For the uninitiated, with the competition heating up in the space, Zomato spent Rs 370 crore to increase the dark store count by 368 in the last six months to 1,007. It is now targeting to ramp up its dark stores to 2,000 by the end of 2025 with another Rs 500 crore deployed.
On the other hand, Zepto had 700–750 dark stores as of November 2024 while Swiggy Instamart had 609 dark stores as of September 2024. According to an HSBC report, the dark store count by quick commerce players in the country could jump to 5,500 by FY26.
This aggressive quick commerce growth is expected to continue for the next couple of years, which will see the market reach around 20 million monthly transacting users (MTUs) by FY26, according to Kushal Bhatnagar, Associate Partner at consulting firm RedSeer.
“Post this, the user growth (and hence the market growth) is expected to stabilize a bit, as indicated by the correction in food delivery growth beyond the around 20 million MTU mark,” he said.
In terms of market share, Zomato sits on top with a market share of 46 per cent in quick commerce while Zepto comes second with 29 per cent and Swiggy follows with a 25 per cent share, as per a recent Motilal Oswal’s report.
According to the data from Statista, Zepto with 69 million downloads was the most downloaded grocery delivery app worldwide in 2024 followed by Blinkit with 35.6 million downloads and Bigbasket with 22.4 million downloads.
Bottomline
The majority of the new quick commerce users are likely to come from the top 30-50 cities, as for the next couple of years, quick commerce plays beyond the top 50 cities are likely to stay confined to experimentation. According to Bhatnagar, it will require platforms to tweak the current dark-store-based model given it may not be viable in less dense markets.
However, achieving profitability in quick commerce may not be easy as companies have to balance the costs of infrastructure, supply chain management, and customer acquisition.
The market operates with razor-thin or negative margins, reflecting the high costs of operations which include delivery costs, discounts or promotions, rider incentives, etc., other than fixed costs.
Typical loss per order is between Rs 20-40, depending upon the basket sizes. Larger basket sizes of Rs 500 or more sometimes break even, and occasionally a margin of around 5-10 per cent can be made on those big basket sizes.
Based on order volume and average order size or basket size likely improving in the next few months, margins should improve for quick commerce firms.
So far, the top quick commerce players are in red. Take Blinkit: The adjusted EBITDA loss for Q3 FY25 was higher at Rs 103 crore in comparison to Rs 89 crore during the same period last year as the company had focused on expansion which led to a pause in margin expansion.
Similarly, Zepto’s net loss for FY24 stood at Rs 1,248.64 crore, marginally down from Rs 1,272 crore in FY23 even as the revenue increased by 120 per cent to Rs 4,454 crore. For Swiggy Instamart, revenue grew 136 per cent to Rs 490 crore in Q2 FY25 while losses stood at Rs 317 crore vis-a-vis Rs 320 crore during the year-ago period.
Eye on policies
Another area which may affect the quick commerce market is the regulatory environment. This could be standards of food safety, labour laws, and taxation policies that may shape how quickly commerce players operate. For example, the government has been working towards regulation of e-commerce platforms through the Consumer Protection (E-Commerce) Rules aimed at protecting the consumer even as it does increase the operational burden for the companies.
This comes with price compliance with these regulations and only the big players will have the wallet to bear that cost.
Moreover, the National Logistics Policy, which was launched in 2022, targets creating a single window e-logistics market that is supposed to benefit players of quick commerce by streamlining regulations around delivery and warehouse management. However, the same policies could create barriers to entry for new players or even encourage consolidation to reduce operational complexity.
Further, the Confederation of All India Traders (CAIT), an association of traders, has alleged that foreign investments have been misused by the quick commerce players, impacting small shopkeepers and kirana stores.
As India’s quick commerce market races towards growth, the road ahead appears to be a mix of promise and challenges.
While the current landscape is replete with competition and opportunity, the sector’s high operating costs and capital intensity suggest that consolidation is likely in the coming years. While time will tell whether this consolidation leads to a more efficient and consumer-friendly market, the race to the top in India’s quick commerce market will be as dynamic and fast-paced as the industry itself.