Swiggy adopts inventory ownership model to boost Instamart margins
Swiggy is transitioning Instamart to an inventory-led model to gain greater control over supply chains, following a strategy pioneered by competitor Blinkit.
Swiggy has announced that its Instamart quick commerce division will begin owning the inventory it sells, a strategic pivot aimed at improving contribution margins by approximately 80 basis points. The company stated that this shift will provide more granular control over assortment, pricing, and operational consistency.
This move mirrors the strategy adopted by Eternal’s Blinkit in 2025, which currently sources 90% to 95% of its sales from its own inventory. Since the transition, Blinkit has moved from operational losses to profitability, largely driven by significant reductions in overhead costs relative to sales volume rather than substantial gains in gross margin.
The shift is necessitated by India’s foreign direct investment (FDI) regulations, which prohibit foreign-owned e-commerce marketplaces from owning their inventory. To comply, both companies have adjusted their shareholding structures to ensure majority domestic ownership and control, capped at a 49.5% threshold for foreign investors.
While owning inventory requires higher working capital and carries risks associated with unsold stock, Swiggy management anticipates that improvements in the working capital cycle will offset these costs. Instamart is expected to complete the transition within the next two to three quarters.