Zepto races past Swiggy Instamart to become number 2 player in quick commerce, says Motilal Oswal

Raamdeo Agrawal, chairman and co-founder of Motilal Oswal is also an investor in Zepto and Swiggy in his personal capacity.

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Zepto, the rapid delivery player that has been on a fundraising spree, is now the second biggest quick commerce player, beating Swiggy Instamart but trailing market leader Zomato-owned Blinkit, in the highly competitive industry, according to Motilal Oswal’s latest report.

To be sure, Motilal Oswal’s wealth team is running the mandate for Zepto’s latest fundraise, as reported by Moneycontrol. Further, Raamdeo Agrawal, chairman and co-founder of Motilal Oswal is also an investor in Zepto and Swiggy in his personal capacity.

Blinkit is the top quick commerce player with a 46 percent market share ahead of Zepto, which has captured 29 percent of the market and Swiggy Instamart was third among major players accounting for 25 percent, as per the report.

Earlier, analysts' estimates had said Swiggy Instamart was the number two player.

ALSO READ: Blinkit junks 'zero notice period' policy as talent hunt simmers in quick commerce

While Motilal Oswal did not shed much light on why Zepto went ahead of Swiggy Instamart, the analysts at HSBC, who held a similar view, said, “Perhaps surprisingly, Zepto is in the middle of the pack. Being a privately held company, we expected Zepto to be the most aggressive in discounting, but it doesn’t appear to be the case.”

“Despite lower discounts, stronger growth for Blinkit and Zepto illustrates their superior execution,” the HSBC note added.

Zepto has also been aggressively spending on capex to open dark stores and go ahead of competitors.

Moneycontrol had earlier reported that Zepto’s monthly burn was trending in the Rs 35-40 crore ($4-5 million) range in May this year, but this has risen over six times in the last three months to as much as Rs 250 crore (around $30 million) in September, the monthly cash burn went as high as Rs 300 crore (about $35 million) in October, as it has amped up investments in operations, digital marketing and hiring.

However, it is too early to declare a winner. “the jury is still out on the path to convergence in Quick Commerce (QC),” the analysts at HDFC said in a recent note to clients.