According to reports, the monthly cash burn for Indian quick commerce companies, including new entrants, has stormed to nearly Rs 1,300-1,500 crore, more than doubling in a few months. This indicates the fierce fight to win users in a highly competitive space.

The stock prices of publicly traded companies Zomato and Swiggy, which run two of the top three rapid delivery platforms, are suffering as the market perceives ongoing pressure on the profitability prospects of the booming industry, despite its growing popularity among urban customers.

The escalating cash burn coincides with heavy fundraising by the top three players—Zomato-owned Blinkit, Zepto, and Swiggy Instamart have raised nearly $3 billion. According to reports, Zepto’s planned IPO this year can affect its pricing and listing.

The speed at which a business depletes its reserves before producing positive cash flow is known as its burn rate. Usually, the money is utilized for marketing, discounts, and personnel expenses to acquire new users and sustain growth.

The majority of the industry's burn was caused by Zepto's aggressive strategies to outperform rivals. According to a BofA Research analysis that used data from Sensor Tower, Zepto's monthly active users increased to 43 million in January, while Blinkit's was 39 million.

Flipkart Minutes and BigBasket's expenditures are included in the total cash burn figure. The introduction of Amazon Now, the 10-minute delivery service from the US e-commerce behemoth, may make the industry even more competitive.

Swiggy Instamart reported an adjusted EBITDA loss of Rs 578 crore for the December quarter, up from Rs 358 crore for the second quarter of this fiscal year. In the July-September quarter, Blinkit reported an adjusted EBITDA loss of Rs 103 crore, compared to Rs 8 crore.