Is India's Quick Commerce Bubble About To Burst? Blinkit CEO Warns Fundraising Model Is Hitting Its Limits

(MENAFN- Live Mint) India's quick commerce sector is heading toward a major shakeout, warns Blinkit CEO Albinder Dhindsa. Startups in this space are burning through cash and struggling to sustain deep losses.

Dhindsa made his comments in an interview with Bloomberg. He said the quick-delivery model, once fueled by non-stop fundraising, is reaching its limits. Despite this, he claimed that Blinkit remains confident and is pushing ahead with its expansion plan.

Platforms such as Swiggy Instamart, Blinkit, Zepto, and BigBasket now face rising competition. They are aggressively fighting for market share, leading to mounting profitability pressures across the board.

What made India's quick commerce sector thrive?

Global investors, including SoftBank Group Corp., Temasek Holdings Pte. and Middle Eastern sovereign funds, have poured billions into the rapidly expanding sector, turning it into one of the world's most closely watched experiments in ultra-fast deliveries.

Similar ventures across the US, Europe, and parts of Asia have unravelled, whereas India has managed to thrive due to its lower labour costs, crowded cities, and widespread adoption of digital payments. However, the business largely relies on whether companies can maintain highly efficient delivery networks and raise sufficient funds to stay afloat.

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These companies are also stepping up their efforts to woo new customers and retain existing ones by offering aggressive discounts. Swiggy, for instance, launched its 'Mega Savings Festival' from 3 October to 7 November, offering zero delivery, handling and surge fees. Zepto followed suit with similar discounts, including zero fees on orders above ₹99, Mint reported earlier.

Investors turn cautious

Investors are starting to become cautious, even as the industry's funding needs continue to rise. Swiggy Ltd., a major player in quick commerce, is preparing a $1.1 billion share sale. This comes barely a year after its $1.3 billion market debut. Meanwhile, competitor Zepto has secured $450 million in fresh capital ahead of a planned Initial Public Offering (IPO) next year, according to Bloomberg.

Both situations highlight how heavily these companies rely on cash. They need this capital to continue funding the rapid delivery of items, from vegetables to iPhones, often promised within just 10 minutes.

Also Read | India Breaks Into Global Quick Commerce Top 3, Outshines Europe & Asian Giants

“Usually when this kind of imbalance exists, the correction is very swift,” Dhindsa told Bloomberg News.“It often catches people by surprise.”

Swiggy's upcoming share sale, coming while its stock still hovers near its IPO price, underscores how investors have begun rethinking the risks of a business that has long been sustained by easy capital used to drive rapid expansion.

A correction could reshape India's consumer tech landscape, revealing how much demand for fast deliveries is largely fueled by discounts, versus which firms have built unique services that customers are willing to pay more for.

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