After receiving approval from shareholders, the food and quick commerce delivery company Swiggy (QCOM) is preparing to transition to an inventory management-based model. This decision removes a key regulatory hurdle for the planned shift.
Analysts predict that the operational transition will begin in the third quarter. Swiggy has already started preparatory work, including discussions with brand partners, inventory planning, and changes to the operational dashboard.
Shobit Singhal, a research analyst at Anand Rathi Institutional Equities, noted that the company will start using the inventory management model from the third quarter, and margin benefits are likely to appear within the next two quarters. He added that preparations for this shift have been underway for the last two or three months.
This change has implications beyond just operational activities. According to an industry source, marketplace operators typically report only the commission they receive, whereas inventory management platforms record the full sales price. Since commissions usually range from 20 to 35 percent, the source calculated that Swiggy's revenue could increase four to fivefold once the changes take effect, depending on the product assortment.
Experts, however, caution that operationally, this transition is not as radical as regulatory terminology might imply. Nishant Shekhar, Managing Director and Partner at Boston Consulting Group, explained that 'the business views the inventory management model as a situation where the brand sells inventory to the platform (QCOM), and the platform largely manages and sells it to the market.'
In his assessment, over 90 percent of QCOM operations already function as inventory management from a business perspective; the marketplace format is mainly limited to newer categories with less predictable demand. Nevertheless, the regulatory distinction remains important as it defines legal ownership of the inventory.
What Blinkit's year has already shown
Since no other QCOM player has made this transition, Blinkit—which switched to the inventory management model a year ago—is the only real precedent, and its figures provide insight into the trade-offs Swiggy is accepting.
Eternal, Blinkit's parent company, reported in its first quarter of fiscal year 27 results that the company completed a full year operating as a first-party business. The company increased its capital expenditure estimate for a stable dark store, including warehousing, from 1 crore rupees to 2.5 crore rupees—costs that Swiggy will likely also incur.
In return, the net order value per store per day increased from 7 lakh rupees to 11 lakh rupees, reflecting larger store sizes, a wider assortment, and more efficient warehousing—a result Swiggy aims to achieve. Furthermore, working capital became more efficient: net working capital is now estimated at 12 days NOV (3.3 percent), compared to 18 days (5 percent) previously—a gain that could help offset higher capital expenditures.
Margins, market share, and the case for control
Satish Meena, founder of Datum Intelligence, expects Swiggy's transition to take three to four months, likely phased by city or store, with sellers no longer needing to register independently under GST as Swiggy handles this. Meena believes the real impact will be seen in margins, but Swiggy may choose to reinvest savings into dark stores, discounts, and market share growth instead of letting them flow directly to profit: 'Swiggy believes now is a very good time to capture market share from Zepto.'
Ravi Kapoor, Partner and Head of Retail Sector at PwC India, stated that the arguments for the inventory management model go beyond simple margin calculation. He noted: 'The shift to inventory management models is driven not only by compliance requirements but also by the need to ensure a more stable and reliable consumer experience.'
He emphasized that direct control over inventory improves assortment, pricing, availability, and order fulfillment speed, as stock can be distributed more widely across dark stores.
However, the marketplace model will not disappear entirely. It remains useful for testing small brands and new categories because unsold inventory is not accounted for on the platform's balance sheet—and as these categories mature and demand becomes more predictable, platforms have an incentive to eventually integrate them into the inventory management model. Industry experts expect both models to operate in parallel, depending on the category and supply chain maturity.
Thus, for Swiggy, the real test is not the regulatory label itself, but the ability to match Blinkit's operational benefits while absorbing capital needs that turned out to be much higher than initially anticipated.