Price war in India’s quick delivery market hits Eternal, Swiggy

Shares of India’s top online grocery companies, Eternal and Swiggy, fell last week amid growing competition from Amazon.com Inc. and Flipkart India Pvt.

Eternal’s stock dropped nearly 4% to its lowest in three months, while Swiggy shares also declined for a fourth week.

Quick-commerce firms, which promise 10-minute deliveries, have ramped up discounts, intensifying a price war.

Profitability may remain under pressure after second-quarter earnings missed estimates, and the companies signaled a focus on growth over margins.

Jefferies reported Amazon Now leads with the highest discounts, followed by DMart Ready, Swiggy’s Maxxsaver, and Flipkart Minutes.

Swiggy Instamart and Zepto have also lowered minimum order values and removed delivery charges, adding to the competition.

Manu Rishi Guptha noted there is “a clear race to the bottom,” as companies prioritize market share over profits.

Ongoing discounting could affect investor sentiment ahead of Swiggy’s planned follow-on share sale of over US$1 billion and Zepto’s impending IPO to raise funds for market share.

🔗 Source: Bloomberg

🧠 Food for thought

Implications, context, and why it matters.

Quick-commerce profitability is questionable despite selective margin improvements

Blinkit (Zomato’s instant delivery arm) posted positive adjusted EBITDA (earnings before interest/taxes/depreciation/amortization) in March 2024 1. Yet a fierce discount fight has pushed leaders to trade near-term profit for share, as seen in China where Meituan lost nearly a third of its value.
India’s instant-delivery market could grow at 40% compound annual growth rate (CAGR) to 2030 from about $6.5 billion in 2024 1. That path needs sound unit economics (profit per order after all direct and indirect costs), now under strain as firms drop delivery fees then cut order minimums amid margin pressure after weak second-quarter results.
Heavy VC funding clouds prospects outside big cities 2. Swiggy plans an over US$1 billion follow-on share sale (a secondary public offering) while Zepto readies an IPO to bankroll expansion.

Brand-funded promotions and retail media create opportunities for measurement vendors

With platforms leaning on brand-funded promotions and retail media (ads sold on a retailer’s own app/site using its shopper data) to subsidize orders, marketers want outside tools that prove promo impact. India’s retail media spend may rise 21.9% in 2025, ahead of paid search and paid social 3.
Zepto’s campaigns deliver 2.3 to 3.8 times return on ad spend within weeks 3. Platforms monetize first-party purchase data from millions of monthly active users to ease discount pressure and lift unit economics.
Measurement firms and adtech vendors that prove incrementality can win new budgets. Zepto has over 60 million monthly active users 3, which gives retail media teams more reach and a clearer profit path.