New Delhi: Swiggy is preparing for a major change in the way its quick commerce business Instamart operates as competition in India’s rapidly growing delivery market becomes tougher. The company is moving towards an inventory led model, a strategy that closely follows the approach already adopted by its biggest rival Blinkit.
The change is aimed at improving Instamart’s financial performance and giving Swiggy greater control over the products sold through its network of dark stores. Instead of depending mainly on a marketplace structure in which sellers have a larger role in holding and supplying products, Instamart will increasingly take direct ownership of inventory. This would allow the company to purchase products in larger quantities, manage stock more closely and have greater control over pricing and product availability.
The move became possible after Swiggy shareholders approved a proposal to limit foreign ownership in the company to 49.5 percent. The decision is designed to help Swiggy qualify as an Indian owned and controlled company under the country’s investment rules. The approval followed an earlier attempt that did not receive the necessary support in May.
The ownership change is important because Indian rules place restrictions on certain inventory based activities by companies that do not qualify as Indian owned and controlled businesses. By changing its ownership structure, Swiggy is creating room for Instamart to take a more direct role in purchasing and selling products.
For Swiggy, the main attraction is better economics. Analysts believe the inventory led approach could increase Instamart’s contribution margin by about 80 basis points, which could translate into an improvement of roughly four to five rupees for each order. At the enormous scale of quick commerce, even a small improvement in the amount earned from every order can make a significant difference to the company’s finances.
The decision also reflects the growing influence of Blinkit in India’s quick commerce market. Blinkit has already moved towards an inventory led structure and has reported improvements in its overall margins over several quarters. The company has also expanded beyond traditional grocery products into areas such as electronics, premium food and other categories that can provide stronger returns.
Swiggy is hoping that a similar strategy can help Instamart narrow the gap with Blinkit. The quick commerce industry is no longer focused only on delivering groceries within minutes. Companies are now trying to improve their purchasing power, increase the value of each order, reduce wastage and sell products that generate better margins.
The competition is becoming even stronger. Blinkit, Zepto and Instamart continue to dominate the sector, while Amazon Now and Flipkart Minutes are expanding their presence. India's quick commerce platforms are now processing more than nine million orders a day, showing how quickly the sector has grown.
Recent figures also show the scale of the challenge facing Instamart. Blinkit recorded a net order value of about Rs 14,386 crore during the January to March quarter, while Zepto recorded about Rs 7,591 crore and Instamart about Rs 5,674 crore. Zepto has therefore moved ahead of Instamart in some measures, while Blinkit remains clearly ahead in overall scale.
The inventory strategy could give Instamart more control, but it also creates new risks. Owning products means Swiggy has to invest more money in purchasing and storing stock. The company will also carry greater responsibility for unsold goods, damaged products and food that expires before it can be sold.
This makes inventory management extremely important. Quick commerce depends on keeping products close to customers so they can be delivered rapidly. But keeping too much stock can increase wastage, while keeping too little can lead to products being unavailable when customers place orders.
Swiggy is making the change at a particularly important time for its business. The company has set ambitious long term financial targets and needs Instamart to improve its path towards profitability. The strategy is therefore not simply about competing with Blinkit on delivery speed. It is increasingly about building a business that can generate sustainable profits.
The wider industry is also facing greater regulatory attention. Recent food safety inspections in Maharashtra found problems at facilities connected to major quick commerce companies, including Instamart, Blinkit and Zepto. Authorities suspended several licences and issued improvement notices following inspections. The action highlights the growing pressure on quick commerce companies to maintain proper storage, hygiene and food safety standards while expanding rapidly.
For consumers, the change may initially be difficult to notice. They are still likely to order groceries and other products through the same Instamart application and receive them through the same network of local fulfilment centres. Behind the scenes, however, the way products are purchased, stored and sold could change significantly.
Swiggy is effectively entering a new phase of the quick commerce race. The early battle was about speed and expansion. The next battle is about efficiency and profitability. By adopting a strategy similar to Blinkit, Swiggy is betting that greater control over inventory can help Instamart improve margins and become a stronger competitor.
The success of the strategy will ultimately depend on whether Swiggy can achieve those efficiency gains without allowing inventory costs and wastage to rise too much. With millions of orders being placed every day and several powerful companies fighting for customers, the next stage of India's quick commerce market is likely to be less about who can deliver fastest and more about who can make those deliveries profitable.