India’s quick commerce sector is witnessing significant cash burn, with companies collectively spending nearly Rs 5,000 crore per quarter, according to Deepinder Goyal, founder and CEO of Zomato. Zomato-owned Blinkit contributes just 2-3% of this amount, while maintaining a market share of 40-45%. Goyal claimed in an interview with Economic Times and emphasized that Blinkit focuses on sustainable growth and disciplined cash investment despite fierce competition in the sector.
Zepto, Blinkit, Instamart Cash Burn
Goyal said , “The total burn for all companies in quick commerce is approximately Rs 5,000 crore per quarter, conservatively speaking. Zepto accounts for more than half of this. In comparison, Blinkit’s burn rate is relatively low, averaging Rs 35 crore per month last quarter.”
Reports from Economic Times indicated that quick commerce players were collectively burning around Rs 1,500 crore every month. While Blinkit’s cash burn represents a small fraction of the industry’s total, it still has a significant share of the market.
Aadit Palicha On Zomato CEO Claim
Co-founder of Zepto Adit Palicha called the statement by Zomato CEO ‘verifiably untrue’ and said, ”It will be clear when we publicly file our financial statements. However, I know Deepinder, and I know he has only good intentions; this quote could have been taken out of context or said as an honest mistake.”
He added, “Deepinder started Zomato when I was 5 years old and he has become a role model for the Indian startup ecosystem. I have personally read all of his blogs and it’s a privilege to learn from and compete with Zomato. Our genuine intention is to build the Indian startup ecosystem together in good-faith, and build a world-class product for the Indian consumer.”
Zepto VS Blinkit VS Instamart
Zepto, an independent player in the segment, is a significant competitor, burning Rs 2,200-Rs 2,300 crore last quarter alone. Despite this, Blinkit has managed to grow its market share with disciplined investments and a focus on execution rather than deep discounting.
“They (Zepto) burned over Rs 2,200 crore last quarter, while we burned 4% of that but still gained market share. So how does it matter? We’ll focus on doing the right thing for the business,” Goyal remarked.
A Citi Research report in February claimed that Blink Its market share at 41%, followed by Swiggy Instamart at 23%. Zepto is reportedly at par or higher than Instamart in market share, according to the same report. Other players in the space like Walmart-owned Flipkart Minutes, Tata-backed Bigbasket, and Amazon.
Zomato Losses
Blinkit CEO Albinder Dhindsa earlier claimed that much of the company’s cash burn was for expansion. Blinkit crossed the 1,000 dark store milestone a quarter ahead of schedule and aims to reach 2,000 dark stores by December 2025, advancing its timeline by a year.
However, the increased cash burn impacted Blinkit’s adjusted EBITDA, which showed a loss of Rs 103 crore in the October-December period, compared to Rs 8 crore in the previous quarter.
Blinkit’s rising cash burn have also affected Zomato’s financial performance. The company reported a decline in profits for the October-December quarter, leading to a 20% drop in Zomato’s share price since January 1. On Monday, Zomato’s stock closed marginally higher at Rs 222.05 on the BSE, reflecting ongoing investor concerns.
Zepto’s IPO Plans
Zepto, which raised over $1.3 billion in the past year, has emerged as a big competitor. It leads in monthly active users, according to BofA Research, and plans to go public by 2025.
