Swiggy – How it is losing out to Zomato; and to Zepto too?

In last couple of days since Swiggy reported a quarterly loss of ₹(922) crore for Q2FY27, the stock fell by more than 21%. But that is just part of the larger value depletion that the stock has seen since listing.

Value depletion in Swiggy since listing

When Swiggy listed in November 2024, it was well received by the market and even managed to cross a price of ₹600 post listing. However, that was the peak. Between early 2025 and early 2026, the stock price of Swiggy halved to ₹300. In the next 9 months to October 2026, the stock has again halved to around ₹170 levels. If you include the pre-IPO, Post-IPO, and IPO fund raising, Swiggy has raised nearly $6.50 billion from investors. However, 60% of these funds raised have been just used to cover losses accumulated over the years. The question; when will cash burn stop, and when will we see profits?

Losing on the quick commerce game

Unlike Eternal (which went all out with Blinkit), and Zepto (a pure quick commerce play), Swiggy Instamart was more of a tentative starter. For quite some time, they underplayed the quick commerce route, and became aggressive only after Zomato and Zepto racked up rapid market share gains. As a result, Swiggy lags Eternal and Zepto in the quick commerce game today. Between FY24 and FY26; Blinkit saw Q-Commerce orders grow 4.5X to 91.7 crore, while Zepto grew orders 5.0X to 64.0 crore. During the same period, Swiggy just about doubled its quick commerce orders to 41.2 crore. Zepto achieved cost efficiency, while Blinkit achieved scale. Instamart lost out on the thrust.

Shifting to the 1P Inventory Model

One of the reasons for the rapid success of the Blinkit model was that it was a First Party (1P) Inventory led model. That means, Blinkit controls the inventory, instead of some third-party having control over the inventory. Swiggy could not adopt that model as it had majority foreign ownership and they are not allowed into the 1P model. Now, Swiggy has capped its foreign ownership at 49.5% and has started the transition to the First Party Inventory Model. Implementation will start in Q3FY27 and be done in 3-4 quarters. That will reduce the working capital cycle and ensure lower working capital locked in. The question is; whether the delay in shifting will prove too expensive for Swiggy?

Competitive dynamics are changing rapidly

Let us not forget that competition in the space is getting tougher. The launch of quick commerce services (Amazon Now and Flipkart Minutes) are a big concern. Both Amazon and Wal-Mart have deep pockets. Also, they are using their clout to expand rapidly into non-urban areas, with less focus on speed and more focus on service delivery. For Swiggy, the competition is going to get a lot tougher. It is not just about market share and store count, but also about how soon they can turn around to operating profitability. The last QIP funding round of Swiggy saw a lot of enthusiasm from institutions. However, the massive price destruction will be an overhang. For Swiggy, the countdown has begun!