US-based Bernstein sees volatile 2026 for India's e-commerce market

Leaders Blinkit and Swiggy face intense competition and unpredictable margins as investors weigh long-term potential in India's fast-growing quick-commerce sector, Bernstein says

Quick commerce remains one of the most competitive segments in India’s consumer market, with the fortunes of platforms such as Eternal and Swiggy shaped more by performance and competitive dynamics than by broad-based consumption trends, Bernstein, the US-based research firm, said in a report.

 

“Quick commerce is one of the most competitive areas of consumer India. Eternal and Swiggy’s fortunes are defined by performance and competitive dynamics rather than consumption as a broad-based theme,” the report noted.

 

The firm described 2026 as another year of exploration rather than immediate profitability. “Another year of discovery, not profits,” the report said.

 

It said 2024 and 2025 changed investor perspectives on quick commerce in different ways. 2024 brought conviction of a large opportunity, while 2025 indicated that high growth can be sustained, but the path to profit is not straightforward.

 

“We think 2026 will bring back focus on: How big is this opportunity truly? What is the right to win (scale, capital, execution, first-mover?) and what could be a steady market structure? As we answer these questions through 2026, we believe the growth and profit expectations — near term and steady state — will keep readjusting.”

 

Bernstein also highlighted a likely return of competitive intensity. In 2025, the performance gap between leaders Blinkit, Instamart and Zepto, and challengers Flipkart, Amazon, BigBasket and JioMart, seemed to grow materially. Bernstein expects higher competitive intensity in 2026, with a collective focus by leaders on core customer cohorts to ‘lock in’ unit economics and efforts by challengers to establish a foothold before it is ‘too late’.

 

“We expect aggressive discounting (especially in 1H26) and store expansion all across,” the report said.

 

The report forecasts roughly 80 per cent industry growth in 2026, but noted that margins are expected to remain unpredictable. Bernstein advised investors to maintain long-term conviction while monitoring operational metrics and remaining prepared for volatility.

 

“We consider quick commerce as a new and improved retail format, not a platform business. Hence, unit economics trajectory remains the key trigger for valuations,” the report said. “While we remain long-term positive on both Eternal and Swiggy being in the top three quick-commerce leaders, for 2026, we prefer Eternal as it offers a more favourable risk-reward proposition.”

 

Investment outlook

 

Bernstein rates Eternal and Swiggy as outperform, favouring Eternal for 2026 returns.

 

Blinkit (part of Eternal) is expected to maintain its leadership. The report said the current price offers a more favourable risk-reward proposition given its established positive contribution margin, better operating metrics across the board, and a much lower cash burn. The target price is lowered slightly to Rs 370.

 

Bernstein said Swiggy can leverage its cash cushion to expand dark stores and improve unit economics. Over time, with majority domestic ownership, Swiggy should also be able to transition to a 1P model, which allows better margins, reduces operational complexity and simplifies regulatory adherence. It said volatility is expected in 2026; the target price is adjusted to Rs 500.