Mint Explainer | Inventory wars: Swiggy and Blinkit stock up in quick commerce race

Swiggy’s decision to hive off Instamart into a separate unit mirrors Blinkit’s inventory-led model, giving the platforms more control over pricing, assortment, and margins—but also exposing them to ballooning costs, warehousing headaches, and seller pushback.

India’s quick-commerce market touched about ₹64,000 crore in fiscal year 2025 (FY25), growing at a 142% CAGR (compound annual growth rate) between FY22 and FY25, according to a CareEdge report. Swiggy’s Instamart and Blinkit (now part of Zomato, renamed Eternal) are competing alongside BigBasket, Zepto, and several regional players. Scale, speed, and efficiency are key: margins are razor-thin, and customer loyalty can shift quickly, putting pressure on platforms to innovate.

Mint unpacks why the move matters, how it works, and what it means for the books.

What is an inventory-led model?

Instead of merely connecting buyers and sellers, the platform buys, stores, and sells goods itself. Stock is managed through its own warehouses or “dark stores", rather than listed through third-party sellers. The flip side: it’s capital-intensive. Holding inventory ties up working capital, requires warehouse management, and carries risks like spoilage.

Instamart added 498 dark stores in FY25, nearly matching its cumulative rollout since 2020, before hitting pause. After Q4, Swiggy stopped expanding dark-store space, opting instead for larger formats (3,500–4,500 sq. ft) that can house up to 20,000 stock keeping units (SKUs). Productivity, measured by gross order value (GoV) per sq. ft, peaked at ₹17,359 in Q2 FY25 but fell 32% to ₹11,762 by Q4, likely reflecting expansion. GoV per sq. ft measures how much order value a dark store generates for every square foot of space, serving as a proxy for efficiency and productivity.

Instamart now contributes ₹2,130 crore to Swiggy’s FY25 revenue, about a quarter of the standalone topline. Blinkit, an Eternal subsidiary, meanwhile, shows no signs of slowing down. It expanded 147% y-o-y to 1,301 stores in FY25, with a vision to reach 3,000 stores and a near-term milestone of 2,000 by December 2025.

According to a September note by Bank of America, Blinkit alone holds over 50% of the 10-minute delivery vertical, while Swiggy and Zepto are competing for the rest.

Why now?

Rising customer frequency has made quick commerce a lifeline for loss-making platforms. Owning inventory allows full capture of retail margins instead of commission scraps, and opens the door to private labels, FMCG (fast-moving consumer goods) deals, and brand ad slots. Bigger baskets and pricier assortments are already boosting order values, helping absorb delivery costs.

“Private labels are still nascent, but Swiggy and BigBasket are more aggressive than Blinkit today. Scaling them is tricky since customers usually look for known brands, but once trust builds, the margin potential is significant," said Satish Meena, co-founder of Datum Intelligence.

The spin-off signals Swiggy’s growing bet on quick commerce, a crowded, capital-hungry market. Losses are mounting: Swiggy posted a ₹896 crore loss in Q1 FY26, even as total value of orders (before discounts, cancellations, refunds, or delivery fees) rose 12% to ₹13,163 crore—still 24% below its peak.

Instamart’s average order value, however, has steadily climbed, from ₹487 in Q1 FY25 to ₹612 in the June quarter, driven by larger baskets and higher-priced assortments.

Instamart contributed 14% of Swiggy’s FY25 revenue. By comparison, Blinkit delivered 26% of Eternal’s—though Eternal’s profit slumped 90% to ₹25 crore as the inventory-led model weighed on margins. That squeeze is likely to appear in Swiggy's books too.

After running dark stores at scale, platforms now know which SKUs to stock, how to manage wastage, and how to move goods efficiently. “Inventory-led is tricky, but they’ve built enough muscle to handle it," said Meena.

Regulatory clouds have also dulled. Foreign direct investment limits and foreign ownership once blocked inventory-led models, but Blinkit’s restructuring and Indian investor backing now give Swiggy confidence to follow, explained Meena.

How does this impact the books?

Unlike the commission-only marketplace model, inventory-led sales record the entire GMV (gross merchandise value) of all orders as revenue, boosting the topline.

In a traditional marketplace, a ₹100 sale with a ₹10 commission shows up as just ₹10 revenue. Under the inventory-led model, the full ₹100 is recorded, while costs are logged separately as expenses.

“Commissions may still exist, but get folded into pricing negotiations," added Satish Meena, co-founder of Datum Intelligence.

For investors, the shift also means cleaner accounts, with Instamart’s numbers to be broken out separately once the spin-off closes after Q3 FY26.

The trade-off

Eternal, Blinkit’s parent, offers a preview of the implications. In its Q1 FY26 results, the company noted that tighter inventory control improves margin leverage and enables faster expansion of assortment.

It also highlighted knock-on effects: Hyperpure’s non-restaurant B2B (business-to-business) business will shrink, as many of its buyers were sellers on Blinkit; quick commerce revenue will rise, mirroring net order value (NOV); Hyperpure revenue will fall; and working capital needs will increase for quick commerce but ease for Hyperpure. Already, about 3% of Blinkit’s NOV came via owned inventory in Q1 FY26—helping revenue surge 155% y-o-y despite flat take rates. That share is expected to climb sharply in coming quarters.

The shift won’t immediately disrupt sellers, as purchase orders, commissions, and ad spends will continue. The bigger change is structural.

“Platforms now act as buyers and distributors, centralizing procurement through warehouses instead of routing orders store by store. In groceries, where margins are razor-thin, controlling inventory is the only way to capture margin, cut inefficiencies, and scale profitably," Meena said.