Zomato, Swiggy shares slide amid rising competition in quick commerce

Shares of food and grocery delivery platform Zomato declined over 10% to Rs 210.15 a piece on the BSE during Tuesday’s morning session after the company reported weak Q3 results.

Zomato’s net profit for the October-December quarter dropped 57% year-on-year (YoY) to Rs 59 crore, compared to Rs 138 crore in the same period last year. The fall was attributed to increased spending and expansion by its quick commerce unit, Blinkit, in a bid to counter competition from rivals such as Swiggy and Zepto.

The weak performance also impacted Swiggy, whose stock price declined by 9% to Rs 427.20 on the BSE.


The market sentiment reflects growing concerns about rising competition in the quick commerce segment. Companies like Zepto, Flipkart, and a potential entry by Amazon have intensified the competitive landscape for Blinkit and Swiggy’s Instamart. This has raised fears of increased cash burn and mounting expenses for industry players.

Also Read: Zepto’s cash burn and the high-stakes game of quick commerce

Both Swiggy and Zomato have been expanding their dark store operations, leading to higher costs, including increased rentals, product discounts, and free delivery services tied to loyalty programs.

Analysts warn these rising expenses could further erode contribution margins and Ebitda, raising concerns about the profitability of their quick commerce operations.

Slowing food delivery demand

Zomato’s food delivery gross order value (GOV) grew by 17% YoY but missed estimates by 1.8%. The company’s management highlighted a broad-based slowdown in food delivery demand, which began in the latter half of November.

This slowdown has also affected Swiggy, whose shares have already declined by about 25% from their peak.

Following Zomato’s Q3 results, several brokerage firms have revised their target price for the company, reflecting concerns over its profitability and competitive pressures in the quick commerce market.