Quick Commerce: The Changing Business Model
The quick commerce (QC) sector in India has witnessed an unprecedented boom, reshaping how urban consumers purchase daily essentials. Platforms like Blinkit, Zepto, and Swiggy Instamart have revolutionized shopping by offering ultra-fast deliveries, making it possible to receive groceries, electronics, and household items within minutes. However, the convenience that consumers enjoy comes at a steep cost for these platforms.
With rising operational expenses, thinning profit margins, and growing competition, QC companies are facing financial challenges that threaten their long-term sustainability. To counter this, they are restructuring their business models, increasing commission rates, and adjusting their pricing strategies to remain viable.
One of the most significant shifts in the industry is the overhaul of commission structures. Blinkit, for instance, is replacing its fixed-rate commission system with a variable commission model, effective from March 13. Previously, Blinkit charged a flat commission based on product categories, but under the new system:
Products priced under ₹500 will be charged a 2% commission.
Products between ₹500 and ₹700 will be subject to a 6% commission.
And products costing more than ₹1,200 will be charged an 18% commission.
These commission rates apply to marketplace transactions only, meaning sellers utilizing Blinkit’s warehousing, logistics, and fulfillment services will face additional costs. Industry estimates suggest that total expenses, including packaging and delivery charges, could consume 30–35% of the selling price. As a result, sellers may either absorb these costs or pass them on to consumers through price hikes.
Zepto has also been modifying its revenue model. As of January 2025, its take rate had increased to 22–23%, indicating that the company now retains a larger share of transaction revenue. This rise in commission and service fees is part of Zepto’s strategy to improve unit economics, especially as it nears an annualized gross sales run rate of $4 billion. However, such cost adjustments inevitably impact both sellers and consumers, raising concerns about the long-term affordability of quick commerce services.
The Cost of Expansion
While quick commerce platforms have focused on expanding their reach, this rapid growth has placed significant financial strain on their operations. Companies are investing heavily in setting up dark stores—warehouses that facilitate ultra-fast deliveries—but the costs of expansion are mounting.
Blinkit, for example, spent nearly ₹370 crore in the past two quarters to build new storage spaces. This aggressive investment resulted in an adjusted EBITDA loss of ₹100 crore in the December quarter alone. Its parent company has infused ₹2,800 crore into Blinkit since acquiring it (formerly known as Grofers) in June 2022.
Other players in the QC sector are facing similar financial pressures. Analysts point out that a significant portion of Blinkit’s 1.3% negative EBITDA in the December quarter was linked to its store expansion strategy. As a result, experts anticipate that the industry will experience its most severe financial strain in the March quarter before any signs of stability emerge.
As of March 2025:
Blinkit operates over 1,000 dark stores.
Zepto has approximately 800 dark stores.
Blinkit plans to increase its total dark stores to 2,000 by December 2025, further escalating costs.
This expansion race among QC companies has intensified competition, forcing businesses to spend more on logistics, warehousing, and operational infrastructure. The challenge lies in striking a balance between growth and profitability, a task that has proven to be increasingly difficult in the quick commerce space.
Regulatory and Market Challenges
Beyond financial concerns, quick commerce companies are also facing scrutiny from regulators and market stakeholders. The All India Consumer Products Distributors Federation, representing nearly 400,000 distributors, has filed a complaint with the Competition Commission of India (CCI) against Blinkit, Zepto, and Swiggy Instamart.
The complaint alleges that these platforms are engaging in predatory pricing and excessive discounting, leading to the closure of more than 200,000 small retail shops across 75–80 cities. Local kirana store owners have raised concerns that QC companies are offering products at significantly lower prices, making it difficult for traditional retailers to compete.
Comparisons between prices on quick commerce platforms and those in physical stores reveal stark differences, raising alarms about the long-term impact on small businesses. If QC firms continue to dominate the market with aggressive pricing, small retailers could struggle to sustain themselves, leading to further closures.
As regulatory authorities investigate these claims, QC platforms are finding themselves caught between maintaining competitive pricing and ensuring financial sustainability. With increasing scrutiny, companies must navigate complex legal and economic challenges while trying to sustain their rapid growth.
The State of Quick Commerce in India
The quick commerce industry has transformed consumer habits, providing unmatched convenience through ultra-fast deliveries. However, the rapid rise of platforms like Blinkit, Zepto, and Swiggy Instamart has also brought financial and regulatory hurdles that threaten long-term stability.
With high operational expenses, increasing commission rates, and growing competition, QC companies are being forced to adapt to survive. The future of the sector will depend on how effectively these businesses can manage costs while maintaining affordability for both sellers and consumers.
