**Title:** Instamart Faces Decline in Orders Amid Expansion Challenges
**Meta Description:** Instamart’s daily orders have dropped 22% over nine months, raising concerns about overcapacity and operational efficiency in the quick-commerce sector.
**URL Slug:** instamart-orders-decline-expansion-challenges
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**Instamart Faces Decline in Orders Amid Expansion Challenges**
Instamart, a player in the quick-commerce sector, has experienced a significant decline in its daily orders per dark store, dropping 22% over the past nine months. The orders fell from a peak of 1,260 in the second quarter of 2024-25 to just 985 by the first quarter of 2025-26. This downturn may be attributed to the typical ramp-up lag associated with new store openings, which often require months to optimize inventory, layout, and local demand. However, experts suggest that the recent decline indicates deeper structural issues, such as overcapacity, rather than mere initial operational challenges. Nilaya Varma, co-founder of Primus Partners, noted that mature dark stores in similar business models usually stabilize at higher order volumes.
Instamart’s productivity, measured by gross order value (GoV) per square foot, peaked at ₹17,359 in the September quarter but subsequently fell by 32% to ₹11,762 in the March quarter. This decline may be linked to the expansion of dark-store areas. Although the GoV rebounded by 12% to ₹13,163 in the June quarter, it remains 24% below its peak. Following a substantial loss of ₹896 crore in the quarter ending June 30, Instamart has paused its expansion efforts to focus on improving utilization, a move that could further widen the lead of its competitor, Blinkit. Meanwhile, Eternal Ltd’s quick-commerce unit is still in growth mode, aiming to reach 2,000 stores by December.
In a similar vein, Swiggy Ltd’s quick-commerce division added 498 dark stores in 2024-25, nearly matching the total number it opened in the four years since its launch in 2020. With a total of 1,021 stores, Swiggy’s warehouse space has expanded 2.6 times to 4 million square feet, indicating a shift towards larger-format facilities. The company has also introduced 44 megapods, each spanning 10,000-12,000 square feet and capable of storing 50,000 stock keeping units (SKUs) in metropolitan areas, which now account for approximately 10% of its total dark-store area and serve 25% of its customer base.
Varma emphasized the challenges of profitability in rapid expansion, stating, “Filling space on the map is easy; filling it profitably is another story.” As more dark stores open in the same city, they may begin to overlap, complicating operational efficiency. Instamart currently holds the smallest market share among the top three quick-commerce players, which translates to fewer orders to justify the additional infrastructure, according to Satish Meena, co-founder of Datum Intelligence. While larger-format stores and megapods can enhance product assortment and increase average order values (AOV), they also incur higher rents and staffing costs. Varma cautioned that whether Swiggy’s expansion will cover these additional costs depends on sustained consumer adoption of larger carts, a challenge that other quick-commerce companies have faced.
As Instamart navigates these operational hurdles, it is also working to catch up in high-density areas where competitors like Blinkit and Zepto have established a strong presence.
**FAQ**
**What factors are contributing to Instamart’s decline in orders?**
Instamart’s decline in orders is attributed to a combination of ramp-up lag in new store openings, potential overcapacity, and operational inefficiencies, leading to lower productivity and market share compared to competitors.
