Zomato’s e-commerce unit Blinki is accelerating its expansion and expects continued losses as competition intensifies in India’s instant delivery market.
Blinkit now aims to reach 2,000 dark stores – small warehouses 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 the quarter December (beating his forecast by a quarter).
That acceleration led to a loss of 103 crore rupees ($11.9 million) in 3Q25 as Blinkit added 368 stores and 1.3 million square feet of warehouse space in the last two quarters.
JPMorgan believes the industry has entered a “land grab mode,” with companies pursuing aggressive strategies around store leasing, product discounts and loyalty programs. The bank wrote in a note that several other big players — including Zepto, the No. 2 player in e-commerce — are expanding their dark store networks “well ahead” as well.
Quick-commerce firms — which deliver food 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 changing demands. of consumers.
“As we continue to bring in store expansion, our networks may need to carry a larger backlog of underutilized stores, which will impact short-term earnings in the next quarter or two,” said Akshant Goyal, CEO financial of Zomato. These investments, he added, are likely to result in growth “that is, over 100%” during FY25 and FY26.
The strategic shift comes amid growing competition. Zepto, backed by Lightspeed, StrepStone and Glade Brook, raised more than $1 billion last year. Zomato also raised $1 billion in November last year through a qualified institutional placement.
Flipkart also launched its e-commerce offering last year and has added more than 100 dark stores. Amazon started its fast-commerce pilot in the South Asian market last month. And Swiggy, which operates India’s No.3 e-commerce platform, listed late last year in what was the biggest tech IPO of 2024 globally.
“The biggest impact of increased competition has been the acceleration in customer awareness and adoption of fast commerce,” said Albinder Dhindsa, who heads Blinkit. He compared it to the early days of food delivery, when increased competition led to higher customer acquisition investments across the industry.
While Blink’s top customers remain loyal – accounting for 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 its current investments in the store network to eventually yield strong returns once the business reaches a larger scale.
The expansion comes as Zomato’s core food delivery business shows slower growth of 17% year-on-year in the last quarter, compared to brisk trade growth of 120%.
