Union Minister Pralhad Joshi has directed e-commerce platforms to adhere to government guidelines on 'dark patterns' and conduct internal audits, or face action. The government has identified 13 such deceptive practices and will form a joint working group for enforcement.
Urban mobility startup Rapido more than doubled its gross order value to $1.25 billion in FY25, driven by new services. However, rising cash burn has pushed it further from profitability. Rapido is now preparing to enter food delivery, hiring from rivals and engaging with major QSR brands and cloud kitchens.
Swiggy's quick-commerce venture, Instamart, is facing significant financial challenges, with substantial losses despite growth in gross order value. Investors are expressing concerns as Swiggy's shares decline, prompting analysts to lower target prices due to intense competition and cash burn. While the company aims for profitability, it needs to improve its financial performance to regain investor confidence.
Zomato is introducing a "long distance service fee" for deliveries beyond 4 km, potentially straining relationships with restaurant partners who fear commission increases up to 45%. Restaurants are considering protesting the new fees and revised agreements, which include penalties for price disparities and encouraging off-platform orders.
Zomato Gold subscribers will now face surge fees during rainy weather, effective May 16th, impacting a previously waived benefit. This adjustment follows Zomato's pause of its 50:50 refund-sharing policy with restaurants. While free delivery within 7km and dining discounts remain, the added rain surcharge could increase order costs. Rival Swiggy already implements similar fees, suggesting a potential industry trend.
In QC segment, while each of firms reported more than 2-fold rise in GOV and revenue, Zomato's QC service Blinkit outshone Swiggy's Instamart. "Instamart continues to lag Blinkit in growth and incremental unit economics," said Anand Rathi Research.
Flipkart is limiting the expansion plans of its quick commerce unit, Flipkart Minutes, as it looks to add new dark stores only in the top six to eight cities, according to people familiar with the matter. Flipkart’s cautious approach to quick commerce comes amid a year of rapid growth in the sector, even as the broader ecommerce segment has slowed.
Zomato's Blinkit and Swiggy's Instamart face heightened competition in the quick commerce sector, impacting profitability. Both companies invested heavily in network expansion in quick commerce, leading to increased adjusted Ebitda losses. Blinkit maintains its lead but anticipates continued margin pressure, while Instamart aims to reduce losses despite analysts' concerns about cash burn.
Swiggy is banking on its 10-minute food delivery service, Bolt, to boost growth and market share in the food delivery sector, despite Zomato's exit from a similar venture. Bolt contributes 12% to Swiggy's food delivery volumes, with the company highlighting improved user retention through the platform. However, increased spending on quick commerce has widened Swiggy's net losses.
Swiggy's food delivery business achieved profitability in FY25, with a significant rise in Gross Order Value and improved EBITDA margins. Instamart witnessed substantial growth but faced losses due to investments in expansion. Overall, Swiggy's consolidated B2C GOV increased, driven by resilient demand and a growing user base across its various services.
In a recent address, Prosus CEO Fabricio Bloisi underscored the tremendous potential within India’s market landscape. The firm has made substantial investments, reaping substantial rewards. The successful IPO of Swiggy marked a pivotal moment for the company. Additionally, Prosus's investment in Rapido has yielded impressive growth. BlueStone has now received the green light from SEBI for its public listing.
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