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E-commerce leader Blinkit is accelerating its expansion and expects continued losses as competition intensifies in India’s instant shipping market.
The Zomato company now aims to reach 2,000 dark stores – small stores in residential areas that exclusively serve online orders – by December 2025, a year ahead of its previous guidance, after surpassing 1,000 stores by the end of December quarter (beating his own). projection of a quarter).
This acceleration led to losses of 103 crore rupees ($11.9 million) in Q3FY25, as Blinkit added 368 stores and 1.3 million square feet of warehouse space in the past two quarters.
JPMorgan believes the industry has entered a “land grab mode,” with companies pursuing aggressive strategies around warehouse leases, product discounts and loyalty programs. The bank wrote in a note that some other major players – including Zepto, the No.2 player in rapid commerce – are also expanding their dark warehouse networks “significantly ahead” of schedule.
Quick-order companies — which deliver groceries and other products to customers within 10 to 15 minutes — are cannibalizing India’s e-commerce market share, forcing established players to overhaul supply chains in response to changes in consumer demand.
“As we continue to advance store expansion, our networks may have to carry a larger load of underutilized stores which will have an impact on profits in the next quarter or two,” said Akshant Goyal, director financial of Zomato. These investments, he added, are likely to result in growth that remains “significantly above 100%” through FY25 and FY26.
The strategic change comes amid intensifying competition. Zepto, backed by Lightspeed, StrepStone and Glade Brook, raised more than $1 billion last year. Flipkart also launched its rapid commerce offering last year and added more than 100 dark stores. Amazon started its rapid commerce pilot in the South Asian market last month. And Swiggy, which operates the No.3 rapid trading platform in India, listed late last year in what was the largest technology IPO of 2024 in the world.
“The biggest impact of intensifying competition has been the acceleration in customer awareness and adoption of rapid commerce,” said Albinder Dhindsa, who heads Blinkit. He compared it to the early days of food delivery, when increased competition led to higher investments in customer acquisition across the industry.
While Blinkit’s core customers remain loyal — including a third of the platform’s gross order value in December — the firm said competitive pressure has led to a pause in margin expansion. The company expects that its current investments in the store network may eventually yield strong returns once the business achieves greater scale.
The expansion comes as Zomato’s core food delivery business shows slower growth at 17% year-on-year in the last quarter, compared to rapid trade growth of 120%.
