Swiggy is prioritizing aggressive expansion for its quick commerce arm, Instamart, after achieving a contribution break-even in May. Despite rising competition, the company plans to increase investments while managing margins. In the June quarter, Instamart’s Gross Order Value rose nearly 40% year-on-year to ₹7,907 crore, signaling a strategic pivot toward market share.
Swiggy has announced a strategic shift for its quick commerce vertical, Instamart, moving from a period of cost-optimization toward a phase of accelerated expansion. This decision follows a milestone reached in May, when the quick commerce business achieved contribution break-even. In its latest communication to shareholders accompanying the June quarter financial results, the company indicated it would calibrate its spending to capture further market share in the rapidly evolving quick commerce sector.
Financial Performance and Operational Metrics
The June quarter saw a strong performance for Instamart, with Gross Order Value (GOV) climbing to ₹7,907 crore, a 39.8 percent increase compared to the same period last year. Adjusted revenue for the segment stood at ₹1,232 crore. A key improvement was noted in contribution margins, which narrowed to negative 0.2 percent from negative 4.6 percent a year ago. Additionally, the adjusted EBITDA loss for the segment was recorded at ₹778 crore. At a consolidated level, Swiggy reported revenue of ₹6,812 crore, representing a 37 percent year-on-year growth, while the net loss narrowed by 34 percent to ₹791 crore.
Strategic Expansion and Efficiency
The company is focused on scaling its infrastructure while maintaining unit economics. During the June quarter, Swiggy added 28 dark stores, expanding its total network to 1,171 units across 131 cities. Notably, more than 45 percent of these dark stores reached contribution margin positivity, a significant improvement from 30 percent in the previous quarter. To refine its user base, the company also disclosed that it removed approximately 4 million unprofitable users over the last nine months, a move aimed at enhancing long-term sustainability.
Competitive Landscape and Leadership
The quick commerce market remains highly competitive, with major players such as Zomato’s Blinkit, Zepto, Flipkart Minutes, and Amazon Now vying for dominance. To navigate this environment, Swiggy has appointed Nandita Sinha, formerly the CEO of Myntra, to lead the Instamart division. Investors will likely monitor how the company balances its goal of maintaining contribution margins between 0 and -100 basis points with the need for aggressive growth to reach sustained profitability. Future updates on dark store productivity, order growth, and the ability to maintain market share against established rivals will be key factors for the market to watch as the company executes this growth strategy.