Amazon Expansion Weighs on Eternal, Swiggy as Quick Commerce Battle Intensifies

Shares of Eternal Ltd. and Swiggy Ltd. have come under sustained selling pressure as global e-commerce companies step up investments in India’s fast-growing quick commerce segment. According to Bloomberg, intensifying competition from Amazon.com Inc. and Walmart-owned Flipkart has raised concerns over profitability, prompting investors to reassess valuations of listed quick commerce players.

Eternal, the parent of Blinkit, has declined 28% from its record high reached in October, while Swiggy has fallen around 47% from its September peak. The combined erosion in their market capitalisation exceeds $15 billion.

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Competition Expands Across Markets

The competitive landscape has changed rapidly over the past few months. Amazon, which entered the rapid delivery business last year, recently announced plans to expand its Amazon Now service to more than 300 cities and towns across India from over 15 locations currently. The company also committed an additional $13 billion investment toward its artificial intelligence and cloud infrastructure in the country.

Flipkart is also accelerating its expansion. As per reports, Flipkart Minutes has already established 1,000 dark stores across 130 cities and is targeting 1,500 facilities covering more than 180 cities over the coming months.

Meanwhile, Zepto is preparing for a public listing and is reportedly planning to raise up to $1 billion, strengthening its ability to compete with larger rivals.

Profitability Remains Under Watch

According to Bloomberg, Franklin Templeton’s Yi Ping Liao said rising competition has weighed on near-term profitability, although the fund manager continues to hold Eternal shares. M&G Investments and Pictet Asset Management have also indicated interest in increasing exposure to Indian quick commerce, while acknowledging that the competitive environment remains intense.

Macquarie Equity Research noted in a report dated May 15 that Blinkit operated 2,243 dark stores as of March 31, compared with Swiggy Instamart’s 1,143 stores. The brokerage also lowered its target prices for both companies and maintained an Underperform rating on Eternal while downgrading Swiggy to Underperform.

Industry Players Continue Capacity Expansion

Apart from Amazon and Flipkart, Reliance Retail is expanding its quick commerce operations through JioMart by leveraging its network of more than 3,100 stores across over 1,200 cities.

Pricing pressure also remains a key concern. While Blinkit reported EBITDA-level profitability during the December quarter, Bloomberg reported that Swiggy’s quick commerce business posted an annual loss of around $460 million, while Zepto recorded losses exceeding $600 million.

Despite the competitive intensity, the market continues to expand beyond metropolitan regions. Emkay, in a June 14 report, said demand for rapid delivery services is increasingly coming from Tier-2 and Tier-3 cities, broadening the addressable market. However, the brokerage noted that the sector remains in an aggressive expansion phase, with competition expected to stay elevated as new and existing players continue to invest in scale and customer acquisition.