Zomato's quick commerce unit Blinkit is accelerating its expansion plans, aiming to reach 2,000 dark stores by December 2025, a year ahead of its previous guidance. This aggressive push comes as competition intensifies in India's instant delivery market, with major players like Zepto, Flipkart, and Amazon entering the fray.

Blinkit has already exceeded its own projections, reaching 1,000 stores by the end of the December quarter. This rapid expansion has led to losses of 103 crore rupees ($11.9 million) in Q3FY25, as the company added 368 stores and 1.3 million square feet of warehousing space in the last two quarters.

According to JPMorgan, the industry has entered a "land grab mode," with companies pursuing aggressive strategies around store rentals, product discounts, and loyalty programs. Other major players, including Zepto, are expanding their dark store networks "sharply ahead" of schedule, further intensifying competition.

Quick commerce firms, which deliver grocery and other products to customers within 10 to 15 minutes, are cannibalizing e-commerce market share in India, forcing established players to overhaul supply chains in response to shifting consumer demands. Blinkit's chief financial officer, Akshant Goyal, acknowledged that the company's investments will likely result in growth remaining "meaningfully above 100%" through FY25 and FY26, but warned that near-term profits may be impacted.

The strategic shift comes amid intensifying competition, with Zepto raising over $1 billion last year and Zomato raising $1 billion in November through a qualified institutional placement. Flipkart also launched its quick commerce offering last year, adding over 100 dark stores, while Amazon began its quick commerce pilot in the South Asian market last month. Swiggy, which operates the No.3 quick commerce platform in India, listed late last year in what was 2024's largest tech IPO globally.

Albinder Dhindsa, who leads Blinkit, noted that the biggest impact of the intensifying competition has been the acceleration in customer awareness and adoption of quick commerce, likening it to food delivery's early days, when heightened competition led to higher customer acquisition investments across the industry.

While Blinkit's core customers remain loyal, comprising one-third of platform gross order value in December, the firm said competitive pressure has led to a pause in margin expansion. The company expects its current store network investments to eventually yield strong returns once the business achieves greater scale.

The expansion comes as Zomato's core food delivery business shows slower growth at 17% year-over-year in the latest quarter, compared to quick commerce growth of 120%. As the instant delivery market continues to heat up, it remains to be seen how Blinkit and its competitors will navigate the challenges and opportunities ahead.

In the broader context, the intensifying competition in India's instant delivery market reflects a global trend, as consumers increasingly demand faster and more convenient delivery options. As the market continues to evolve, it will be crucial for companies to balance their investments in expansion with the need to maintain profitability and sustainability.