Zomato’s e-commerce unit, Blinkit, is slowing expansion and expecting continued losses as competition increases in India’s fast delivery market. Blinkit now aims to reach 2,000 dark stores – small warehouses in residential areas that specialize in serving online orders – by December 2025, a year ahead of its previous guidance, after surpassing 1,000 stores at the end of the December quarter (beating its own projections by a quarter. ). This acceleration led to a loss of 103 crore rupees ($11.9 million) in Q3FY25, as Blinkit added 368 stores and 1.3 million warehousing boxes in the last two quarters. JPMorgan believes the industry has entered “land grab mode,” with companies pursuing aggressive strategies in terms of store leases, product discounts and loyalty programs. The bank wrote in a note that several other major players – including Zepto, the No.2 player in instant trade – are developing their network of dark stores as well “well ahead” of schedule. Fast-paced e-commerce companies — which deliver groceries and other products to customers within 10 to 15 minutes — have eroded India’s e-commerce market share, forcing established players to overhaul their supply chains in response to changing consumer demands. “As we continue to continue our store expansion, our network may have to bring in many unused stores which will impact our short-term profitability in the next quarter or two,” said Akshant Goyal, Zomato’s chief financial officer. These investments, he added, will result in sustained growth of “more than 100%” through FY25 and FY26. The strategic shift comes amid increasing 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 quality institutional placement. Flipkart also launched its instant commerce offering last year and added more than 100 dark stores. Amazon started a fast-commerce pilot in the South Asian market last month. And Swiggy, which operates the No.3 fast trading platform in India, was listed last year in the largest technology IPO in 2024. “The biggest impact of the intensifying competition has been the acceleration in customer awareness and adoption of fast trading,” said Albinder Dhindsa, who leads Blinkit. He compares it to food delivery startups, when increased competition led to higher customer acquisition investments in the industry. While Blinkit’s core customers remain loyal — comprising one-third of the platform’s gross order value in December — the company says competitive pressures have caused a pause in margin expansion. The company expects its current store network investment to yield strong returns once the business achieves greater scale. The expansion comes as Zomato’s core food delivery business showed slower growth at 17% year-on-year in the most recent quarter, compared to fast-commerce growth of 120%.
