Swiggy said it will prioritise breaking even with respect to its contribution margin in the quick commerce business rather than chasing discount-led volume growth, even as rivals escalate price wars to capture market share, executives said on the company’s Q3FY26 earnings call.
“So I think our effort is to continue to increase the contribution margin,” Rahul Bothra, Chief Financial Officer (CFO) at Swiggy, said during the call.
To explain, contribution margin reflects how much Swiggy keeps from an order after covering delivery, fulfilment, and discounts, and whether that order adds to or drains the business before fixed costs.
Senior executives repeatedly described the current competitive environment in quick commerce as irrational, arguing that aggressive discounting is inflating short-term order volumes without building customer loyalty or durable unit economics.
“The irrationality of that growth (driven by aggressive discounting and fee waivers) is so high that it is leading to a customer switching from one platform to the other without having any loyalty,” said Amitesh Jha, Chief Executive Officer (CEO) of Instamart, during the earnings call.
“Market leadership is never going to happen by spending tonnes of good money on honestly buying growth,” Jha further added.
The comments come as rivals take different routes through the same price war, with Zepto and Flipkart Minutes relying more on fee cuts, Blinkit pushing back on heavy discounting while responding selectively to market pressure, and Reliance Retail scaling quick commerce through store-led fulfilment rather than speed guarantees.
However, Swiggy is now drawing that line more explicitly. This sharper stance contrasts with Swiggy’s positioning last quarter, when affordability-led scaling was framed as a necessary response to competitive pressure.
Why is Swiggy saying discount-led growth is not worth chasing?
Jha said discount-heavy strategies disproportionately attract deal-sensitive users who switch platforms frequently, weakening retention and basket quality. As a result, Swiggy is unwilling to deploy capital toward growth that does not improve long-term customer behaviour, even if that means conceding near-term order volumes.
“The right structure of growth is putting investment into an area that is sustainable over the long run,” Jha said, adding that Swiggy is prepared to compromise on growth that does not strengthen unit economics.
That position is formalised more sharply in Swiggy’s Q3FY26 shareholders’ letter. Swiggy’s C0-Founder and CEO, Sriharsha Majety said that recent investments in lower consumer-side monetisation “have not yielded the desired incremental order growth, especially at the bottom of the Average Order Value (AOV) pyramid,” and are being reviewed.
“We have consciously chosen not to participate in deep-discount-driven, purely volume-focused growth that sacrifices AOVs and margins,”…
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