Blinkit, Zepto ahead of Swiggy Instamart in quick commerce, says Citi

Blinkit, Zepto ahead of Swiggy Instamart in quick commerce, says Citi

Swiggy Instamart is behind in the quick commerce race, as Zomato-owned Blinkit and Zepto have cornered a higher market share in India’s highly competitive rapid delivery market, according to Citi’s latest report.

“In quick commerce, Swiggy may be in the third spot in terms of market share behind Blinkit and Zepto…We estimate Swiggy’s market share at 23 percent, and Blinkit’s market share at 41 percent,” the report said.

While Citi did not provide a market share estimate for Zepto, analysts noted that industry reports and data traffic trends suggest that “Zepto might be par/higher than Swiggy” in quick commerce share.

“The gap in unit economics and cash burn rate for Swiggy are materially worse relative to Zomato which means there is a lot of ongoing convergence on customer acquisition pace, AOV (average order value) increase, supply chain cost reductions that Swiggy needs to deliver,” the note stated.

The Citi report corroborates previous analyst estimates which suggested that Zepto had overtaken Swiggy Instamart.

A report by Motilal Oswal, in November last year, stated that Zepto had raced past Swiggy to become the second largest quick commerce player in India, Moneycontrol reported earlier. The report had pegged Blinkit’s market share at 46 percent, with Zepto in second spot at 29 percent. Swiggy Instamart was third among major players, accounting for 25 percent.

This comes at a time when competition in the rapidly growing quick commerce space is heating up, and companies operating in the market are on an expansion spree in a bid to capture market share.

As of the third quarter of FY25, Blinkit and Swiggy Instamart are operating with total dark store counts of 1,007 and 705, respectively. Meanwhile, this figure is around 750 for Zepto, which has been on a funding spree for a year and a half.

Blinkit has a target of reaching 2,000 dark stores by December this year, and Instamart is looking to cross the 1,000-store mark by March. Zepto, likewise, is aiming for 1,200 stores by the end of FY25.

While Blinkit seems to be the clear leader in quick commerce, Zepto and Instamart have been battling it out for the second spot. However, despite their similar market shares, Zepto may now be operating at a larger scale.

Zepto Co-founder and CEO Aadit Palicha, last month, shared that the company’s gross order value (GOV) tripled over the last eight months to around $3 billion (~Rs 24,500 crore). This GOV would put the firm at par with Blinkit, and much ahead of rival Swiggy Instamart.

For context, Blinkit reported a GOV of Rs 6,132 crore in Q2 FY25, which translates to an annualised GOV of around Rs 24,528 crore. This is just a touch above Zepto's Rs 24,500 crore, even though the Gurugram based company has a larger market share than Zepto.

Meanwhile, Instamart reported a GOV of Rs 3,382 crore during the same period. Its GOV on an annualised basis would, therefore, figure in at an estimated Rs 13,528 crore while not being far behind in terms of market share.

Regardless, analysts are of the view that Instamart is well placed to fend off competition.

“Over the medium term, we believe the platform advantage (common overheads, shared tech infrastructure, shared delivery partner fleet) and first-mover advantage (unique supply-chains technology and infrastructure) should be a source of significant competitive advantage for Swiggy (along with the two other leading QC players),” the Citi report said.

Competition in the space is also expected to peak out in the next two quarters, as firms fulfil their expansion target.

The quick commerce market in India is expected to reach an annualised GOV run rate of $9 billion by the end of FY25 for the top three players, and cross $26 billion by FY28E, growing at a CAGR of 73 percent, the Citi report stated.