Industry Overview
It is anticipated that the Indian Quick Commerce market will bring in US$5,384.00 million by 2025. A compound annual growth rate (CAGR 2025-2029) of 16.60% is anticipated for this market, resulting in a projected market volume of US$9,951.00m by 2029. A youthful, tech-savvy populace and rising smartphone penetration are driving the quick commerce sector in India. The Quick Commerce sector has expanded as a result of India’s expanding middle class and rising disposable income. Furthermore, the digital economy has grown as a result of foreign investment drawn to India by the government’s digitization initiatives and the country’s ease of doing business. Nonetheless, regulatory obstacles and inadequate infrastructure remain a danger to the expansion of the Quick Commerce business in India.

Recently, the quick commerce space has been near a saturation point due to cut-throat competition amongst key players in the market such as Swiggy, Zomato, Zepto, etc. Investors have begun to worry even more after the Q3 Results of Zomato which were announced on the 21st of January, 2025.

Worrisome Stakeholders
Investors in Quick Commerce companies have been rudely awakened by Zomato’s performance. On Tuesday, January 21, the company’s stock was down 10%, while rival Swiggy’s stock was down 9%. Based on their performance up to the previous quarter, shop rollouts, and market trends including expanding customer bases, increasing order values, expanding assortments, and store expansion, investors had mentally mapped out a path to profitability for these companies’ rapid commerce businesses. It was anticipated that Blinkit, Zomato’s fast commerce division, would approach breakeven during the December quarter.

While affirming that these tendencies are still there, Zomato’s management comments that accompanied its results also indicated a sense of urgency to open locations quickly, even at the risk of lower profitability. By the end of the year, it plans to build another 1000 dark stores, bringing its total to 1000, extending its goal by a full year. Additionally, it stated that even though the gross order value will expand by more than 100%, losses will persist in the near future.

The two main factors causing this trend to change are competition and the increasing demand from customers. The privately funded Zepto has become aggressive with its intentions for retail expansion, while publicly traded competitors like Swiggy are growing. The popularity of speedy commerce in the private market has also been cemented by the success of Zomato and Swiggy in the public markets. Zepto seems to be receiving money from investors hand over fist. Then there are e-commerce businesses that are entering the fast-paced market. Even omni-channel retailers are investigating methods to expedite delivery. The word “quick” is becoming synonymous with all online retail platforms.

As a result, the incumbents are working to increase their market share in other markets while also fortifying their position in the top ten cities, which are the primary drivers of rapid commerce growth. Future app fatigue may be a major contributing factor in this case.

Customer Retention is crucial
Analyze Blinkit’s retention rate for clients who made a single purchase between September 2022 and December 2022 from a different angle. Despite the rise in competition during this time, this customer group’s retention rate is 40–42 percent from March 2024 to December 2024. These clients also cover the cost of shipping. They are also what consumer firms call stickiness, even if Zomato promotes them as evidence of its unique proposition and execution.
Thus, if you attract clients early and provide them with a positive experience, they may become lifelong clients. This explains why it is necessary to open more stores in order to attract a larger percentage of clients who are switching to rapid commerce and then provide them with the services they require to stay loyal in the face of competition.

This will result in more depreciation, more investments, and a larger percentage of new stores that are not yet profitable in the short term. Because of the increased need for labor in the rapid commerce sector, competition may also result in higher operating expenses. When Swiggy’s results are released, it should be evident whether this kind of retail expansion has an effect on the company’s performance.

There’s another reason to be concerned. Zomato claimed that because of the low level of customer demand, their meal delivery service grew somewhat slowly. This is related to the slowdown in urban consumption that has occurred in certain areas. Profitability has increased, but business growth has slowed. In the December quarter, QoQ growth was only 3%.

Future of QC companies
The performance and future prospects of listed rapid commerce companies are questioned by Zomato’s financials, but the ecosystem is also called into uncertainty. For QC players as well as e-commerce and omnichannel businesses, online commerce will be a difficult environment. Significant expenditures and faultless execution are required in the battle to get customers on board—not just for groceries, but for everything from clothing to electronics—and deliver them in ten minutes. If not, accidents will probably occur, and it won’t be shocking if they do within the next year or two.

Conclusion
The primary cause of investors’ preference for short-term investments over long-term ones is their perception that QC plays are becoming profitable, which led them to overlook the comparatively high stock prices. Second, it’s unknown who will ultimately prevail among the expanding field of QC competitors. Thirdly, it is also clear how lengthy the long-term prospects will be if everyone chooses to invest. Investor opinion for these stocks may improve as the winners are separated from the losers, as time goes on, or when values become more realistic.