Quick Commerce Discounting Wars Nearing End: Eternal CEO
Eternal CEO Albinder Dhindsa believes the quick commerce industry's discounting war may be nearing its end, citing peak competitive intensity and limited room for rivals to deepen subsidies without worsening losses.
Intelligence analysis by Llama
Eternal CEO Albinder Dhindsa thinks the quick commerce industry's discounting war is nearing its end, as there's little room for rivals to deepen subsidies without worsening losses. This could lead to better margins and sustainable profitability, pushing players to invest in dark stores and infrastructure.
Imagine you're at a store, and they're giving you discounts to buy things. But after a while, the discounts stop, and you have to pay the normal price. That's what's happening in the quick commerce industry. Companies are giving big discounts to get customers, but it's not sustainable. They're losing money, and it's hard to keep giving discounts. So, they're trying to focus on making their stores and services better, so customers will stay even when the discounts stop.
Analysis
A $60B Vote of Confidence
Eternal CEO Albinder Dhindsa believes that the quick commerce industry's discounting war may finally be approaching its end. During the company's Q1 earnings call, Dhindsa opined that the sector has reached peak competitive intensity, arguing that there is little room for competitors to deepen subsidies further without significantly worsening their losses. He further said that the quarter represented the most aggressive phase of competition the industry has witnessed so far, driven by both a larger number of competitors and higher spending on customer incentives.
Why Cursor?
Important to highlight here that both Amazon and Flipkart announced plans of significant expansion and investments to bolster their quick commerce play over the past few months. Meanwhile, Blinkit's close rival Zepto took a step further in its listing ambitions after filing an updated draft red herring prospectus for an IPO, which comprises a fresh issue worth INR 8,010 Cr. However, Blinkit believes the industry's competitive dynamics are becoming more predictable.
The Road Ahead
As per Dhindsa, most of the competitive activity is centred around discounts rather than achieving structural advantages. "We don't think there is a lot of wiggle room for people to go much deeper than what they are currently doing because that would pollute losses very significantly," he noted during the earnings call. The comments come in the backdrop of Blinkit reporting its fifth consecutive quarter of adjusted EBITDA improvement in Q1. Blinkit's revenue grew 18.4% sequentially to ₹15,664 Cr, while net order value (NOV) rose 19% QoQ to ₹17,132 Cr. Important to highlight that Blinkit's strong revenue growth has come on the back of the quick commerce platform moving to an inventory-led model in September 2025. During the quarter, Blinkit added 200 net new dark stores, taking its network to 2,443 stores. In Eternal's shareholder letter, CFO Akshant Goyal reiterated plans to continue investing aggressively in larger stores, warehousing and supply chain infrastructure. This, he believes, will be a more durable competitive advantage than discount-led customer acquisition. In the shareholder letter, CFO Goyal also said that the company has invested about ₹3,000 Cr in capital over the past four years to build Blinkit's network of stores and warehouses, adding that these investments in building the investments will continue as long as the company generates healthy returns. Overall, Eternal reported a consolidated net profit of ₹92 Cr in Q1 FY27, up nearly 3.7X YoY, while operating revenue surged 182% YoY and 17% QoQ to ₹20,211 Cr.
Key points
- Eternal CEO Albinder Dhindsa believes the quick commerce industry's discounting war may be nearing its end.
- The sector has reached peak competitive intensity, with little room for rivals to deepen subsidies without worsening losses.
- Companies are focusing on investing in infrastructure and improving customer experience instead of matching competitors' discounts.
- Blinkit's revenue grew 18.4% sequentially to ₹15,664 Cr, while net order value (NOV) rose 19% QoQ to ₹17,132 Cr.
- Eternal reported a consolidated net profit of ₹92 Cr in Q1 FY27, up nearly 3.7X YoY, while operating revenue surged 182% YoY and 17% QoQ to ₹20,211 Cr.
If the discounting war ends, quick commerce players could see better margins and sustainable profitability, leading to increased investment in dark stores and infrastructure. This could improve customer experience and loyalty, making the industry more stable and attractive to investors.
If the discounting war continues, quick commerce players could see increased losses and decreased profitability, making it harder for them to invest in infrastructure and improve customer experience. This could lead to a decline in the industry's overall health and attractiveness to investors.
