Swiggy Instamart, the quick commerce arm of the food delivery giant Swiggy, has experienced both significant growth and considerable challenges in the rapidly evolving Indian market. An interview with CEO Sriharsha Majety reveals the strategic direction the company is taking to navigate this complex landscape and secure its future.
One of the primary challenges Instamart faces is intense competition. The quick commerce sector in India is becoming increasingly crowded, with major players like Blinkit, Zepto, Amazon Now, and Flipkart Minutes vying for market share. Blinkit, in particular, has emerged as a strong competitor, often outperforming Instamart in key metrics like gross order value (GOV) and unit economics. To address this, Instamart is focusing on strategic investments aimed at sustainable growth. This includes expanding its dark store network and optimizing existing facilities for greater efficiency. Swiggy plans to increase its dark store count to 1,046 by March 2025 and is replacing smaller stores with larger formats. The company is also introducing "megapods" in major cities, which can house over 50,000 stock-keeping units (SKUs) to offer a wider selection of products.
Another challenge lies in profitability. While Instamart has seen substantial growth in GOV, this has not always translated into significant margin gains. Higher marketing and employee expenses have offset some of the improvements from reduced contribution margin losses. Swiggy is aiming for Instamart to reach contribution break-even by the third quarter of 2025-26 (October-December 2025) and adjusted EBITDA break-even by Q2 of 2026-27 (July-September 2026). Increasing the average order value (AOV) is crucial for sustaining revenue growth and improving margins. As of Q2 FY25, Instamart's AOV stood at Rs 499, and the company is projecting double-digit annual growth.
Maintaining ultra-fast delivery times amidst expansion is also a critical challenge. Analysts have raised concerns that the introduction of megapods could potentially compromise the 10-minute delivery promise, a key factor in competing against Blinkit and Zepto. Swiggy is aware of this and is likely working on optimizing its logistics and supply chain to maintain quick delivery speeds despite the expanded selection.
Looking ahead, Swiggy has several strategic plans for Instamart's future. One key move is expanding Instamart's reach to smaller cities. In March 2025, Instamart was available in 100 cities across India. This expansion aims to tap into the growing demand for quick commerce beyond the major metropolitan areas. Another significant development is the launch of a standalone Instamart app. This aims to provide users with a more direct and convenient experience, potentially attracting a wider audience beyond Swiggy's food delivery users. Swiggy is also focused on improving customer stickiness. With many users having multiple quick commerce apps on their phones, Instamart needs to differentiate itself through superior assortment, pricing, and overall customer experience.
CEO Sriharsha Majety believes that Instamart has the potential to surpass Swiggy's food delivery business in both penetration and scale. He emphasizes that customer experience, not just capital, will be the deciding factor in the success of quick commerce platforms. By focusing on strategic investments, expanding its reach, and enhancing the customer experience, Swiggy aims to solidify Instamart's position in the competitive quick commerce market and achieve sustainable growth and profitability.
