Swiggy, Eternal Drop Over 3.5% On Amazon Now’s Expansion Plans

The stocks of quick-commerce companies declined on the bourses on Tuesday, a day after Amazon Now announced expansion to 100 cities of the country. The development stoked competition fears for established companies like Swiggy and Eternal.

While the stock of Swiggy declined up to 2.5 percent on the bourses, the stock of Eternal lost 3.8 percent in early trade. Eternal remained the worst-performing scrip among the Nifty 50 constituents on Tuesday.

The stock opened almost flat at Rs 255.65 but soon declined to as low as Rs 246 apiece, which was about 3.8 percent lower than the previous close of Rs 255.60 apiece.

Similarly, the stock of Swiggy opened marginally lower on Tuesday at Rs 285.55 compared to the previous close of Rs 286.40 apiece. It further declined to Rs 279, which was 2.5 percent lower than the previous close.

The selling pressure came as Amazon Now on Monday announced its expansion to 100 cities in the country. “Amazon will scale its specialised fulfilment infrastructure to over 1,000 micro-fulfilment centres (MFCs) to support this growth. The expansion will also enable more than 16,000 farmers to take their produce directly to customers through sellers on Amazon Now,” the company said in a statement.

Among the 100 cities, names like Pune, Hyderabad, Chennai, Kolkata, Jaipur, Lucknow, Kanpur, Chandigarh, Ahmedabad, Meerut, Mysore, Panipat, Kochi, Amritsar, Mangalore, and Vizag are included. The services of Amazon Now are currently available in Mumbai, Delhi-NCR, and Bengaluru.

The expansion will directly increase competition for companies like Swiggy and Zomato. While Swiggy runs its quick-commerce arm under the Instamart brand, Zomato’s parent Eternal has Blinkit.

Amazon Now’s rapid expansion is part of Amazon’s investment of over Rs 2,800 crore (~USD 300 million) to further strengthen associate safety, health, and financial wellbeing measures while strengthening one of India’s safest, fastest, and most reliable operations networks, the company said.