Quick commerce dark stores set to zoom but it will come at a cost | Mint

New Delhi: Quick commerce companies are projected to conclude fiscal year 2026 with 5,000-5,500 dark stores, a modest increase from the 4,550 anticipated at the end of the current fiscal year, according to a report by HSBC Global Research.

In FY24, industry players like Swiggy (Instamart), Zomato (Blinkit), and Zepto operated 1,800 dark stores collectively. That figure is expected to grow significantly by FY25 before stabilizing in FY26.

“We believe leading companies like Zepto are likely to expand to 1,000 stores (from 850 currently) and then look to optimise this capacity and improve profitability. Even Blinkit may not end up opening 1,000 stores this year. Swiggy is also likely to expand its dark store count to 1,000 soon this year and then moderate its expansion going forward, in our view. It’s likely there will be 5,000-5,500 stores by the end of FY26 or even before,” analysts said in a report.

At an optimal level, these stores can have a throughput of nearly $35-40 billion. Throughput is defined as the amount of a product or service that a company can deliver.

“These are our gross order value estimates for FY28 for the industry and by the end of this year there will be enough store capacity to cater to FY28 gross order value throughput expectations. In that context we expect store additions to moderate during this year,” they said. 

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Competition in quick commerce has intensified over the past 12 months with more companies such as Flipkart and Amazon announcing their entry into the segment.

Meanwhile, existing platforms have been aggressively expanding store capacity and opening up new markets. For instance, in the December quarter alone Zomato’s Blinkit added 216 stores versus 152 in the previous quarter. 

In fact, the company’s management has decided to advance the timeline for reaching the milestone of 2,000 dark stores from December 2026 to December 2025. The company is looking to double Blinkit’s dark stores or warehouses to about 2,000 by the end of this year from about 1,007 currently.

Newly listed food and grocery delivery firm Swiggy is looking to increase its Instamart dark store count from around 600 to nearly 1,046 by March 2025.

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Profitability impact

This aggressive strategy may, however, impact profitability. Losses for Blinkit, for instance, are projected to increase for a couple of more quarters on the back of greater dark store additions, the company’s management said announcing December quarter earnings earlier this week.

Blinkit incurred an expenditure of nearly ₹370 crore in the previous two quarters for setting up new warehousing space. The business reported ₹100 crore of adjusted Ebitda loss in the December quarter with the management guiding for elevated losses in the next couple of quarters. Ebitda stands for earnings before interest, taxes, depreciation, and amortization. 

“As we continue to expand our network rapidly, we expect the quarterly capex (capital expenditure) to stay elevated at these levels for the next few quarters. The higher capex is also the key reason behind the quarterly increase in depreciation,” said Albinder Dhindsa, chief executive of Blinkit, said during the company’s earnings announcement.

Zomato has pumped ₹2,800 crore in the quick-commerce subsidiary since it acquired the firm (earlier known as Grofers) in June 2022. Swiggy that operates Instamart is yet to announce its December quarter earnings.

“Zepto (unlisted) and Swiggy have recently been aggressively expanding capacities as well. This expansion has impacted profitability. In the December quarter for Blinkit, based on data provided by the company, the larger share of the losses (1.3% negative EBITDA) was due to new store launches,” HSBC analysts said.

Analysts at HSBC expect the quick commerce sector to bear the worst impact of this aggressive expansion in the March quarter of the current fiscal. “Economics should improve thereafter,” they added.