The mushrooming madness of Quick commerce in India has turned into a gold rush – only the gold might just be fool’s. Everyone from Flipkart to Big Basket has suddenly decided it is worth burning through millions to deliver bananas and bread in 10 minutes; translating to not just aggressive scaling but a feeding frenzy.

The bigger problem is almost nobody is making money doing it and case in point –  Zomato, which is pouring serious capital into Blinkit, this is less a business strategy and more a financial minefield waiting to explode.

Déjà Vu of Destruction, Are We Repeating a Mistake?

If all of this sounds familiar, it should. The current chaos is eerily reminiscent of India’s telecom wars – an industry that began with sky-high ambitions and ended with bankruptcies, courtroom drama, and government bailouts – even dominant players in quick commerce are struggling to scrape profits. And yet, here we are again, watching companies throw money into a segment with negligible margins in the hope that someone else drops out first.

Slick Pitch, Bleak Reality And Why the Numbers Don’t Inspire Confidence

The fact is it may look easy from the outside but competition means deep discounting, and that means cash burn. And yes, there is no denying the fact that the opportunity might be large in the long-term, but that phrase – “long-term” – is doing a lot of heavy lifting in the present and as far as Zomato is concerned, it isn’t just dabbling in quick commerce anymore; it’s diving headfirst into the fire.

On paper, Zomato is flying high. Its stock is the top performer in the Nifty 50, rising 40% in a year where the broader index delivered just 8%. But let’s scratch beneath that surface – the company trades at an eye-popping 468x P/E ratio, a valuation that defies business fundamentals and is based entirely on future hope. Only Nykaa, Sapphire Foods, and Westlife have higher ratios, and that’s hardly reassuring.

Even as mutual funds have upped their stakes in Zomato, foreign investors are quietly trimming theirs, pulling back from 52.5% to 44%. That’s a red flag dressed in optimism.

Quick Commerce Is Gobbling Up Profits

Let us put numbers into perspective – food delivery and quick commerce together make up 65% of Eternal’s (Zomato’s) revenue, the share of food delivery in adjusted EBITDA has fallen from 53% to 39% in just a year. Meanwhile, quick commerce (the money-guzzling arm) has increased its share from 20% to 28%.

The problem is – Quick commerce still isn’t profitable and food delivery was the only vertical consistently turning a positive EBITDA.

In Q4 FY25, Zomato’s revenue grew 8% – but profits fell 34%. This is a reversal from a year ago when the company was growing both top and bottom lines. The engine that powered its profits – food delivery –  is now slowing down, while the cash-burning rocket –  Blinkit – is being pushed harder.

But then it brings us to the question – Is Blinkit expanding blindly and is Blinkit’s Blitzkrieg Starting to Backfire?

In its mad rush for dominance, Blinkit added 294 dark stores in Q4 FY25, the most ever; but nearly 40% of its entire network (1,301 stores) is underutilised. The positive – transacting customers have grown to 13.7 million, but if most of the infrastructure isn’t working at full capacity, those numbers start to look hollow.

Deepinder Goyal’s own words: “We will not let short-term profitability come in the way of growth.” That statement may sound ambitious, but it also echoes the kind of irrational exuberance that tanked companies in India’s startup ecosystem before. 

Which brings us to the second question – is it diversification or desperation that is the real reason Zomato is pivoting?

For, Zomato, it isn’t pushing into quick commerce just for fun, it’s doing so because food delivery is a battlefield; with Swiggy biting at its heels and now Rapido jumping into food delivery with a flat-fee structure, margins are under pressure. Rapido’s model could undercut Zomato’s commissions drastically, charging just 8%-15% compared to Zomato’s 25% rake. For restaurants and customers alike, that’s an attractive alternative. Zomato knows this, and it’s nervous.

What’s even more – Akshant Goyal, the CFO, seems unsure too. “We don’t have a point of view yet,” he said about Rapido’s new model – that for sure isn’t confidence, perhaps a corporate code for “we’re watching and worrying”?

That leads us to the third question – Bleeding the restaurants, taxing the users, Zomato’s model looks exploitative?

According to HSBC, restaurants are already charging customers 15%-20% more due to delivery platform commissions. On top of that, Zomato takes a 25% commission and adds delivery fees too. The result is Indian consumers are paying through their noses. Compared globally, Zomato’s fees are among the highest and it’s beginning to show in user fatigue and switching behavior.

The Big Guns Are Coming

If Zomato thought the game was only between Blinkit, Zepto, and Instamart, it’s in for a rude awakening. Big Basket, backed by Tata, is preparing a 10-minute nationwide rollout by FY26. Amazon has already muscled in and Flipkart also has its plans in motion – when deep pockets meet patience, it’s usually the early players who bleed. And with Zomato betting on speed over sustainability, the timing couldn’t be worse.

Can This Delivery Race Ever Be Profitable? Analysts Aren’t Sure

India’s obsession with instant gratification has created a monster –  quick commerce and some analysts, like those at Axis MF, are cautiously pessimistic, warning of intense price wars and the potential for a telecom-style shakeout.

Others like Emkay and HDFC Securities remain bullish, believing in long-term scale. But even Emkay’s optimism is hedged: they expect the stock to stay “range-bound” in the near future due to investments and competition.

That’s just another way of saying – don’t expect magic anytime soon. Nevertheless, Blinkit it, Instamart it, Zepto it – the names have become verbs in urban India’s daily life. But behind the convenience lies a harsh truth: this business model bleeds money and it’s increasingly clear that their shiny new venture is anything but sustainable.

Too Sweet to Spit, Too Bitter to Swallow; The Quick Commerce Catch-22

Let’s not forget – food delivery is Zomato’s only cash cow. It’s the one vertical that’s shown steady profits in a business otherwise defined by red ink. But with intense competition from the likes of Swiggy and new players like Rapido breathing down its neck, even that cash cow is now being milked to death.

And once that starts drying up, Zomato will be forced to do the unthinkable: charge more on quick commerce. The question thus is – how many customers will stick around when the “free delivery” bubble bursts?

Swiggy’s financials last quarter are a warning shot – its losses nearly doubled. Zomato, meanwhile, watched its profits nosedive by 77%. Sure, revenue went up – 45% for Swiggy, 64% for Zomato – but revenue without profit is a vanity metric. The higher the sales, the deeper the losses. In short, both companies are trapped in a quick-commerce rat race where the finish line keeps moving and the costs keep piling up.

Quick commerce is addictive –  for customers and investors alike. What began as a marketing gimmick (get milk in 10 minutes!) has become routine. Most urban Indians can’t imagine life without it. Blinkit, Instamart, and Zepto have become household names but this convenience comes at a crippling financial cost to the platforms providing it.

Consumer Behaviour Has Changed, But at What Cost?

There’s no denying the cultural shift quick commerce has caused. FMCG giants like HUL, Nestlé, and Parle are reengineering supply chains just to stay relevant. Nestlé India, for instance, now tailors packaging and promotions specifically for quick commerce which now comprises almost half its ecommerce revenue. That’s huge. But while big brands might find ways to make margins work, platforms like Blinkit are still footing the bill for customer satisfaction.

Burn Till You Break, The Economics Don’t Add Up

Here’s the ugly truth – quick commerce is a financial furnace. Warehouses cost money. Riders cost money. Inventory management, rapid logistics, shrinking delivery times, they all cost a fortune. But users, they don’t want to pay for convenience and platforms that charge even ₹20-25 per delivery risk customer backlash.

HSBC estimates the Indian quick commerce market needs 60 million users ordering twice a week and paying ₹20–₹25 per delivery just to reach $30 billion in market size. That’s a pipe dream at this stage, India’s consumers are famously frugal and allergic to paying extra unless they’re baited with discounts or loyalty points.

Victims of Their Own Success

Blinkit, Instamart, and Zepto have built a product Indians love. That’s the irony. Their growth is explosive and yet, it’s the exact reason they’re bleeding. As long as everything is subsidised, people will order. But the moment the discounts dry up or product variety starts to shrink, customers will vanish faster than your order confirmation screen.

What’s worse is all three platforms are now locked in an arms race where each has to outspend the other to stay relevant. There’s no winning here – only surviving. And even that is starting to look difficult.

The Last Bit,

Convenience Without Profit Is Just a Short-Term Illusion – India’s quick commerce boom may have changed consumer habits, but it hasn’t cracked the profit puzzle.

And for Zomato, already under strain, betting its future on a business where loyalty depends on discounts and margins are razor-thin is a dangerous gamble. The moment the cash cow stops mooing, this house of cards could collapse.

Because in the end, popularity doesn’t pay the bills. Profitability does and Goyal’s big gamble may not pay off!

Goyal still believes in food delivery. He talks about low penetration, rising urban incomes, and the future of eating out. But the numbers betray that faith. Food delivery is losing its dominance in Eternal Limited’s revenue mix, while quick commerce is gaining without turning a profit.

Hence, Zomato’s sky-high valuation, investor enthusiasm, and expansion bravado are being held up by quick commerce’s promise. But promise isn’t profit. And for now, it feels like Zomato is trying to outrun a storm with a leaking engine.

Thus in all fairness – Quick commerce might be the future — but for many it’s a future that could cost them everything!