India’s two leading e-commerce companies, eternal-owned by Blinkit and SwiggyInstamart, they have described as “irrational” the competitive intensity in the space of fast trade.

In a letter to shareholders after the company announced its third-quarter earnings, Sriharsha Majety, co-founder, managing director and group managing director of Swiggy, said Instamart’s recent investments in lower consumer monetization have not yielded the desired incremental growth in orders amid “irrational competition” in the fast commerce space.

Because competition is high and irrational in fast-paced commerce, Swiggy said its growth at the bottom of the average order value pyramid has been slower. “Our ultimate right to win will come from the fruit of our differentiated assortment proposition and we just want to focus disproportionately on bringing the proposition to life in a bigger way as we navigate the path to profitability,” Majety explained.

“Even if this creates short-term problems in order growth in an irrational market, we believe that focusing on these two while continuously improving the consumer experience is the right strategy to win in the long term,” he added.

Blinkit also highlighted “irrational competitive intensity” in its call letter to shareholders last week. “In periods of irrational competitive intensity, customer acquisition remains anchored in a smaller set of discounted categories and lower margins, which slows natural basket expansion,” said Albinder Singh Dhindsa, founder and CEO of Blinkit.

The Gurugram-based e-commerce company said its guidance of 3,000 dark stores by March 2027 assumes continued irrational competitive intensity. “However, if competition moderates in the near term, we would like to target 3,500-4,000 stores by March 2027,” Dhindsa added.

Amid irrational competitive intensity, accelerating store count or assortment is counterproductive as the underlying demand profile drives the path to profitability for these new dark stores, Dhindsa said. “While aggressive price actions can stimulate demand, that demand is often less durable, leading to a moderation in subsequent growth,” he added.

The comments come a month after the founder of India’s top e-commerce player warned that India’s e-commerce industry is headed for a shakeout as investor appetite fades.

“Generally, when this kind of imbalance exists, the correction is very quick,” Dhindsa told Bloomberg.

“It often takes people by surprise.” Blinkit, which turned EBITDA into break-even in the third quarter, said that despite high competitive intensity in recent months, it saw margin improvement helped by supply chain cost efficiencies, a favorable shift toward long-tail categories and operating leverage.

Meanwhile, Swiggy said it is difficult to predict the short-term growth trajectory of fast commerce.

“Some of our recent efforts to test the relevance and velocity of user behaviors through commission-free campaigns have met with limited success due to the continued irrationality of competitive activity through pricing and monetization levers. We have chosen not to participate in fueling this behavior, so we are choosing to forego these incentive-driven volume gains. Therefore, this may impact short-term volume growth.”