India's ecommerce stocks outperform on quick delivery optimism

India’s ecommerce stocks have outperformed local indices and regional peers over the past month, driven by optimism in the quick commerce sector.

Shares of Swiggy rose 20% in June, while Eternal gained 11%, both beating the NSE Nifty 100 Index.

In contrast, China’s food delivery sector saw losses due to intense price competition, affecting companies like Meituan and JD.com.

Domestic players like Swiggy, Eternal, and Zepto hold around 88% of India’s quick-commerce market, according to JM Financial.

Bloomberg Intelligence projects the sector to grow to US$100 billion by 2030.

🔗 Source: Bloomberg

🧠 Food for thought

1️⃣ India’s quick commerce oligopoly creates high barriers for new entrants

India’s quick commerce market has rapidly consolidated into an oligopolistic structure, with just three companies controlling 88% of the market. Blinkit leads with 45% market share, followed by Instamart at 27% and Zepto at 21% 1.

This concentrated market structure creates significant barriers for new entrants like Amazon and Flipkart, who must build extensive dark store networks from scratch while established players already operate hundreds of locations.

Zepto alone maintains 200-250 dark stores across major metro cities, giving incumbents a substantial first-mover advantage in logistics infrastructure 1.

The rapid expansion of dark retail space, projected to grow from 24 million square feet in 2023 to 37.6 million square feet by 2027, demonstrates the massive capital investments required to compete effectively 2.

This explains why even global giants must prove they can manage delivery costs sustainably when facing entrenched competitors with established supplier networks.

2️⃣ E-commerce profit focus replacing growth-at-all-costs strategy

The strong stock performance of Indian e-commerce companies reflects a fundamental shift in business strategy from growth-at-all-costs to sustainable profitability—a transition that’s increasingly attractive to investors.

Companies are actively improving unit economics by raising average order values (which have doubled from ₹250 to ₹500), applying more discipline to discounts, and introducing fees for premium services 1.