Zomato’s Blinkit and Swiggy’s Instamart are facing intense competition and remain unprofitable in the March 2025 quarter.

Blinkit’s adjusted EBITDA margin dropped to -1.9% of Gross Order Value, while Instamart’s margin worsened to -18%, reflecting deepening losses despite growing operations.

Both platforms aggressively expanded store networks, with Blinkit adding 294 stores and Instamart 316, contributing to higher losses year-over-year.

Executives from both companies acknowledged profitability challenges, with Blinkit not expected to turn profitable until FY2027 and Instamart aiming for margin breakeven in 3 to 5 quarters.

Zomato has shut down underperforming services like Quick and Everyday, while Swiggy continues investing in Bolt, its 10-minute delivery service.

🔗 Source: The Economic Times

🧠 Food for thought

1️⃣ Burn rate disparity reveals the economics of scale in quick commerce

The significant difference in burn rates between market leader Blinkit and challenger Instamart highlights the powerful economics of scale in quick commerce.

Blinkit’s adjusted Ebitda margin of -1.9% means it loses just Rs 2 for every Rs 100 of Gross Order Value compared to Instamart’s -18% margin (Rs 18 loss per Rs 100 GOV), despite aggressive expansion by both companies.

This difference in burn rates demonstrates how early market leadership translates into efficiency advantages through higher utilization of dark stores and delivery networks.

The sector’s economics are further influenced by the significant fixed costs of dark stores, with Blinkit operating toward 2,000 such locations while Instamart aims for 1,000 stores by early 2025.

Average order values in quick commerce have increased to Rs 500-650, up from Rs 350-400 previously, showing how companies are trying to improve unit economics by encouraging larger basket sizes to offset delivery costs.

2️⃣ Quick commerce represents India’s third wave of digital commerce evolution

The current quick commerce boom represents the third major evolution in India’s digital commerce journey, following distinct historical phases.

India’s first e-commerce wave (1999-2010) was pioneered by companies like FabMart.com (later IndiaPlaza) and early Flipkart, focusing primarily on books and electronics with delivery times measured in days rather than minutes.