The report notes that Swiggy, Eternal outperform markets on profitability hopes
With renewed investor interest in the quick-commerce sector has lifted expectations for profitability and market dominance, India’s top ecommerce stocks have outpaced local indices and regional rivals over the past month, Bloomberg reported.
Swiggy surged 20 per cent in June, outshining the NSE Nifty 100 Index, while Eternal, the parent of Blinkit and food delivery major Zomato, climbed 11 per cent. This rally comes even as China’s food-delivery giants struggle with price wars that have eroded over USD 70 billion in value for leaders like Meituan and JD com since March.
India’s quick-commerce market, promising delivery of daily essentials in 10 minutes, is rapidly expanding, with Bloomberg Intelligence projecting it could hit USD 100 billion by 2030. Despite fresh competition from Amazon and Flipkart, incumbents Swiggy, Eternal, and unlisted Zepto are expected to retain dominance owing to strong supplier networks and early-mover advantages.
“Established players have shown they can manage delivery costs effectively, especially in paying and utilising riders efficiently,” said Nirav Karkera, head of research at Fisdom. “New entrants still need to prove they can do this sustainably.”
As of now, Blinkit, Instamart (Swiggy), and Zepto control nearly 88 per cent of India’s quick-commerce market, according to JM Financial. Eternal’s acquisition of Blinkit in 2022 has given it a firm lead in the segment. The incumbents have built extensive networks of dark stores and warehouses, a costly expansion that previously weighed on margins.
This year, analysts expect those expenses to stabilise, enabling a shift towards profitability. “Losses may have already peaked for both Blinkit and Instamart,” JM Financial analysts led by Swapnil Potdukhe wrote in a June 26 note. Companies are also raising average order values, curbing discounts, and monetising through service fees and premium offerings.
While Zepto’s gains have come largely at Instamart’s expense, Swiggy is still improving its financials. It remains unprofitable, but sentiment has brightened, with analyst ‘buy’ ratings reaching a post-IPO high.
An upcoming IPO from Zepto could divert some investor attention, but analysts believe the market has room for multiple strong players.
“The incumbents continue to stretch their lead in users as well as in store networks, despite lowering discounts and levying delivery and handling fees,” said Aditya Soman, CLSA. “We remain positive on the quick-commerce opportunity. We believe there is enough room for the incumbents and a couple of new entrants.”
