Eternal Ltd. and Swiggy Ltd. got the 10-minute delivery party going in India. Now, e-commerce titans Amazon.com Inc. and Walmart Inc.’s Flipkart are looking to crash it.
Eternal, whose Blinkit does doorstep delivery of everything from eggs to electronics within minutes, has slipped 28% from its October all-time high as of Thursday’s close, while rival Instamart’s owner Swiggy has plunged about 47% from its recent peak in September. That adds up to a selloff of more than $15 billion for the duo as investors get spooked by the onslaught of competition.Amazon and Flipkart are doubling down on India’s booming $11 billion rapid-commerce segment, building out their network of last-mile warehouses, called dark stores, to push into smaller cities. Meanwhile, Zepto Ltd. plans to raise as much as $1 billion via an initial public offering, amassing a war chest to take on market leader Blinkit and Swiggy Instamart.
“The challenge right now is that the competition is really high, so near-term profitability is depressed,” Franklin Templeton fund manager Yi Ping Liao, who holds shares in Eternal, said in an interview. “The risk is the duration of the competitive intensity.”Seattle-based Amazon, which started ultra-fast deliveries last year, is making up for its delayed entry. It announced plans last week to expand the Amazon Now service to more than 300 Indian cities and towns, up from more than 15 right now, as it pledges to invest $13 billion more to build its AI and cloud infrastructure in the country.Flipkart Minutes has scaled to 1,000 dark stores to take its offering to 130 cities in less than two years, according to a report in The Economic Times. Flipkart is looking to set up 1,500 stores in 180-plus cities in the next few months, the report said.“Based on store expansion and aggressive discounts offered, we believe Amazon will take away some market share from the incumbents,” said Rashi Talwar Bhatia, chief investment officer at Ashmore Investment Management India LLP, who’s holding Swiggy shares due to their discounted valuation.Blinkit had 2,243 dark stores in the year ended March 31 while Swiggy is trailing at 1,143, according to a May 15 report by Macquarie Equity Research.Billionaire Mukesh Ambani’s conglomerate is leveraging Reliance Retail Ltd.’s vast network of brick-and-mortar stores under to push into quick commerce across categories under its JioMart platform. Its network of 3,100-plus stores serve more than 1,200 cities, Reliance shareholders were told at the annual general meeting earlier this month.‘Years, Not Quarters’
