The rising competition in the quick commerce segment hit the margins of Swiggy Instamart in the third quarter of the ongoing fiscal year (Q3 FY25) as the company stepped up investments to fend off the rivals.

Swiggy Instamart’s contribution margin dropped to -4.6% during the quarter under review from -1.9% in the preceding quarter (Q2FY25).

The company attributed this decline to higher growth investments, particularly in user activation, and the expansion of darkstores across multiple regions. It added that increasing competition led to higher customer incentives and increased cost of customer acquisition, leading to the dip in contribution margin.

Notably, the quick commerce segment’s adjusted EBITDA margin also slipped to -14.8% in Q3 FY25 from -10.6% in the last quarter, largely due to the dip in contribution margin and increased brand and performance marketing spends.

Despite this, Swiggy Instamart reported a 88.1% year-on-year (YoY) and 15.5% quarter-on-quarter (QoQ) growth in gross order value (GOV) to INR 3,907 Cr. Its monthly transacting users (MTUs) grew 62.7% YoY and 13.9% QoQ to 7 Mn in Q3 FY25.

Notably, Swiggy Instamart added 96 new dark stores in Q3 FY25, taking the total number of active dark stores to 705.

(The story will be updated soon)

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