Quick commerce war set to intensify as Swiggy builds war chest to take on Zomato's Blinkit

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The Indian quick commerce landscape is set for a significant escalation in competition following food delivery giant Swiggy's successful ₹10,000 crore Qualified Institutional Placement (QIP), which was subscribed 4.5 times. According to Jignanshu Gor, Director & Senior Research Analyst at Bernstein, this fundraise constitutes a 'war chest' for Swiggy to challenge the dominance of Zomato-owned Blinkit. Speaking with CNBC TV18, Gor noted that a 'war is brewing' in the sector.

Gor explained that Swiggy's primary objective with the fundraise is to go 'toe-to-toe with Blinkit', which already possesses a formidable cash reserve of close to ₹18,000 crore. Combined, the two main rivals now command a cash pile of approximately ₹35,000 crore. This financial muscle is expected to fuel an intense battle for market share, where Swiggy has recently ceded ground. "They have lost market share. They will attempt to add more stores and gain back," Gor stated, predicting that aggressive pricing and discounting will continue to be primary strategies. He said this cash pile could mean a 'bonanza for customers' through continued discounting, as companies prioritise growth.

Addressing concerns about a potential bubble, highlighted by Blinkit CEO Albinder Dhindsa's recent comments, Gor acknowledged that in the market crowded with six or seven large players, consolidation is inevitable. However, he believes the narrative is shifting from pure growth towards demonstrating profitability. "I believe right now they are shifting the narrative back again to profitability… I think the year of 2026 might be -- 'you have a warchest, but show me you can be profitable," he commented.

For investors looking to gain exposure to the quick commerce space, Gor identified a clear frontrunner. "Blinkit is by and far the leader in terms of size, in terms of unit volumes, in terms of profitability metrics as well as the growth rate that they are showing. So that is a clear winner in our view," he advised. Bernstein expects Blinkit to remain the leader for the next three to four years, making its parent company, Zomato, the natural winner and a recommended long-term investment. The upcoming Initial Public Offering (IPO) from Zepto is another factor set to influence the competitive dynamics.

While Zomato remains the top pick, Gor cautioned that the competitive landscape will evolve significantly over the next 12 months. "The landscape today versus 12 months later will be very different. So there will be ups and downs. You might get a better price depending on what happens with the rest of the competition," he concluded, suggesting that the impending sector 'war' could present more attractive entry points for investors in Zomato's stock by 2026.