Sriharsha Majety notes that Instamart has grown out of the shadow of food delivery as a standalone brand, with its gross order value and user base at over two-thirds of food delivery already
While Instamart has grown out of the shadow of food delivery as a standalone brand, and its gross order value (GOV) and user-base are over two-thirds of food delivery already, Sriharsha Majety, the Co-founder of Swiggy, has highlighted that competitive intensity remains fairly high in general from both ‘quick commerce-only’ and ‘quick commerce-also’ players.
“The former are modulating investments based on their specific network capacities and strategies, while the latter are calibrating expansion by figuring out if their model should be ‘quick’-commerce or ‘quick-enough’-commerce,” Majety noted in a letter to shareholders.
Majety noted that the company’s quick-commerce segment continued to accelerate in Q1, and clocked 108 per cent year-on-year (YoY) GOV growth to Rs 5,655 crore. After more than doubling its darkstore footprint and expanding to 80 new cities over the second half of FY25, the company has been sweating the network built-out.
“In Q1, we expanded operations to 127 cities (vs 124 in Q4), and added darkstores selectively for alleviating capacity constraints or creating coverage in specific pockets that demonstrated the need. Our focus has been on improving wallet-share by increasing basket size, which is one of the prime determinants of long-term profitability,” the Co-founder added.
Quick commerce posted a Rs 896 crore loss for the quarter, and Adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) margin improved to -15.8 per cent from -18 per cent. Majety emphasised that some cart-consolidation led by Maxxsaver and letting go of some low average order value (AOV) orders and unprofitable users drove a lower order growth, in favour of higher value-growth
