Bloomberg reports that Blinkit CEO Albinder Dhindsa says easy capital fades, startups face tough survival choices
India’s quick commerce sector is heading for consolidation as easy capital disappears, Albinder Dhindsa, Chief Executive Officer (CEO), Blinkit, said, warning that companies dependent on repeated fundraising will soon face hard choices on how long they can sustain heavy losses, Bloomberg reported.
The sector, one of the world’s fastest-growing delivery markets, has attracted billions of dollars from global investors including SoftBank Group Corp., Temasek Holdings Pte. and Middle Eastern sovereign funds. While similar rapid-delivery businesses have faltered across the United States, Europe and parts of Asia, India’s dense cities, lower labour costs and widespread digital payments have supported expansion, though profitability remains uncertain.
Dhindsa said the sector’s business model, which has depended heavily on continuous fundraising, is approaching its limits as funding needs rise and investors grow less willing to back sustained losses.
Investor caution is rising even as companies seek more capital. Swiggy, a rival to Blinkit, is preparing a USD 1.1 billion share sale about a year after its USD 1.3 billion market debut, with its stock trading near its IPO price. Zepto has raised USD 450 million ahead of a planned initial public offering next year.
Both fundraising moves highlight the cash intensity of delivering goods ranging from groceries to electronics within minutes.
Dhindsa said such imbalances typically lead to swift corrections that often take market participants by surprise.
Analysts at Bernstein Societe Generale Group said last month that Eternal, owned by Blinkit, has emerged as the likely long-term leader in the sector, citing execution, unit-level profitability trends and more than USD 2 billion in cash. They cautioned that increased competition could force heavier spending before the company reaches positive free cash flow. Blinkit remains loss-making as it invests to enter new markets.
Competition has intensified with the entry of Amazon, Walmart, Flipkart, and Mukesh Ambani’s Reliance Retail. Structural challenges, such as fragmented supply chains, limited cold-chain infrastructure and uneven procurement, continue to make India’s quick commerce market more complex than traditional e-commerce.
Dhindsa said the divide between traditional online retail and quick commerce would narrow over time. Blinkit works with thousands of third-party sellers and stocks categories ranging from large appliances to more than 6,000 book titles, and will expand only into segments where it can solve issues such as returns and sizing in fashion.
The company plans to continue investing as demand expands into smaller towns, home to a large share of India’s population. In rural and semi-urban markets, more robust supply chains and clusters of “dark stores” which are small, strategically located warehouses, are required before operations become efficient. Dhindsa said infrastructure, not demand, remains the primary constraint.
Blinkit is shifting more of its procurement to local entrepreneurs who aggregate supplies of fruits and vegetables, a move the company says creates semi-skilled warehouse jobs and encourages workers to return to their hometowns.
Despite rapid growth, Dhindsa said India remains the only major market where quick commerce is still scaling, while also recording some of the highest competitive cash burn.
(With Input from Bloomberg Report)
