Swiggy is expanding Instamart’s own brands, which it says bring customers back more often, while Eternal’s Blinkit has ruled out private labels and earns advertising revenue from the brands it stocks, according to the two companies’ shareholder letters and earnings calls for the September quarter. More than one in eight Instamart orders now includes a product from No!ce, Swiggy’s private food brand.
“When you find success in a few shoots, which are harder to replicate for other competitors, I do think it’s responsible for us to double down and find even more differentiation,” Swiggy managing director and group CEO Sriharsha Majety said on the company’s earnings call on October 22.
“We don’t want to become both the platform and a competitor to the brands on the platform,” Eternal Group CEO Albinder Dhindsa wrote in Eternal’s shareholder letter a day earlier.
Blinkit, which made an adjusted operating profit in the quarter, earns revenue from brands’ advertising. Instamart, which is still losing money and earns less from advertising, is building its own brands.
Why is Instamart building its own brands?
“As speed becomes table stakes in quick commerce and aggressive pricing proves unsustainable, we believe differentiated assortment will help us build a unique consumer proposition,” Swiggy wrote in its letter. “We view assortment as a curation game rather than a volume game.”
Customers who buy No!ce show 15 percentage points higher retention, according to Swiggy. The company says No!ce is “often priced at or near incumbent SKUs while offering superior quality, which also makes it margin-accretive.” The brand now has more than 500 products.
No!ce sits within a wider range Swiggy calls Switch, which also includes Nectr, its own fruits and vegetables brand launched in Bengaluru this quarter, and products created with about 400 brands. Switch products featured in over 20% of Instamart orders in September.
“This gives us higher retention, and therefore this helps us in our profitability and our EBITDA journey,” Instamart CEO Nandita Sinha said on the call, referring to earnings before interest, tax, depreciation and amortisation (EBITDA).
Swiggy expects about two-thirds of Instamart’s improvement towards break-even to come from earning more per order through product mix, own brands and advertising. It expects the rest to come from cutting costs.
Why has Blinkit ruled them out?
“The shelf space and visibility we would spend marketing an own label can instead help other brands grow on our fair and neutral platform,” Dhindsa wrote. “This also allows us to earn advertising revenue as the brands grow.”
Blinkit evaluated private labels and found they would neither bring new demand nor improve its economics after accounting for the cost of building and marketing them, Dhindsa wrote. Product development, manufacturing, quality control and marketing “would not be within our core circle of competence,” he wrote.
Blinkit makes one exception. For fruits and vegetables, Eternal’s restaurant supply business Hyperpure handles sourcing and quality control for Blinkit “without a separate consumer-facing brand,” Dhindsa wrote. Swiggy has launched Nectr as a consumer brand in the same category.
Why do the two weigh advertising differently? Blinkit’s case rests on earning revenue from brand advertising, while Instamart earns less from it. Instamart’s monetisation rate is “markedly different” from those of listed peers and “has not really moved in the last three quarters,” Bernstein analyst Jignanshu Gor said on Swiggy’s call. Instamart’s take rate, or the share of order value it keeps as revenue, fell by 1.4 percentage points in the quarter, according to Swiggy’s letter.
Swiggy says its brand partnerships help close that gap. Co-creating products with brands “increases our engagement with them” and will help Instamart “take up our monetization rates,” Sinha said on the call. Instamart’s monetisation rate rose by 0.1 percentage points this quarter, she said.
Where do the two businesses stand?
- Blinkit: It made an adjusted EBITDA profit of Rs 184 crore in the quarter, runs 2,751 stores and plans to reach about 5,000 by March 2028, mostly in smaller cities.
- Instamart: It lost Rs 895 crore on the same measure, runs 1,240 stores across 133 cities and does not plan to enter new cities in the near term.
“Blinkit enjoys a pretty strong flywheel that has been compounding over the years,” Majety said on the call. He said Swiggy would strengthen Instamart in its existing cities before using cash “because it exists in the bank to set up new flags.”
CLSA’s Aditya Soman asked on the call how the strategy would “change the story long term” when “we are talking only about one in 8 orders having these SKUs.” “If everyone’s going to do exactly the same things because they’re good ideas, that’s also not the sure shot path to EBITDA zero,” Majety said.
How have their positions developed?
In April 2025, Dhindsa said Blinkit would not launch private labels, even though it owned its inventory. This quarter’s letter is the first time Eternal has set out its reasoning in detail. Around the same time, restaurant bodies raised concerns that private labelling by Zomato and Swiggy would hurt small, local food businesses, Inc42 reported.
Swiggy expanded its own brands as Instamart’s contribution margin, or the revenue left after variable costs, moved close to break-even. It presented assortment as central to Instamart’s growth at its Capital Markets Day in August.
Also read:
- Five strategic developments from Eternal’s Q2FY27 earnings call
- Ordering Via ChatGPT on Swiggy Services Isn’t Quite Working
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