Like everywhere else, the Indian consumer’s fascination for everything to arrive in under half an hour began during the pandemic lockdowns — with daily essentials. But while the likes of Fridge No More, Buyk, Jokr, and Getir died or faded away in the US once shopping habits normalized, the Indian industry just kept getting bigger by shortening delivery times and adding more items — from pillows to prescription drugs — to the list of things available for instant gratification. Apps like The strike has spark ...

Core Insights - The quick commerce sector in India is facing a potential shakeout as funding dries up, with companies needing to reassess their business models and losses [1][4] - Despite challenges, Blinkit aims to thrive and expand, focusing on logistics efficiency and local supply chains [1][8] Industry Overview - Global investors have heavily invested in the quick commerce sector, making it a focal point for rapid delivery experiments, although similar ventures in other regions have struggled [2] - The Indian market benefits from dense cities, lower labor costs, and digital payments, but the sustainability of the business model relies on logistics and capital access [2][7] Competitive Landscape - Competitors like Swiggy and Zepto are raising significant funds, indicating the high cash requirements for rapid delivery services [3][6] - The entry of major players like Amazon and Walmart has intensified competition, complicating the operational landscape due to fragmented supply chains and cold chain limitations [7] Company Strategy - Blinkit is focusing on expanding into categories where it can address operational challenges and is shifting procurement towards local entrepreneurs to build infrastructure [8][9] - The company is committed to sustainable growth, avoiding excessive discounting that could harm long-term economics [10] Future Outlook - A sector reset is anticipated as companies align their ambitions with capital costs and supply chain complexities, potentially leading to consolidation and refined strategies [11] - The quick commerce market in India is unique, with rapid scaling potential but also high competitive cash burns, indicating a need for strategic adjustments [10]

Summary of Key Points from the Conference Call Industry Overview - The focus is on the Indian consumer market, particularly evaluating the anticipated recovery in consumption for the festive season of 3Q F26 [1][2]. - The analysis is based on three data points: UPI transaction data, app usage data for e-commerce, and management commentary from 2Q F26 conference calls [1]. Core Insights - **UPI Transaction Data**: - UPI transactions now account for approximately 39% of India's Private Final Consumption Expenditure (PFCE) [2][21]. - The growth in UPI transactions has been slowing, indicating that the increase is reflective of underlying category growth rather than merely a shift in payment methods [2]. - No consumption category is showing definitive festive momentum, with most categories experiencing lower YoY growth in October 2025 compared to 2Q F26 [3][28]. - **E-commerce and Quick Commerce Trends**: - Quick Commerce platforms like Blinkit, JioMart, and BigBasket are experiencing significant DAU growth of 70-200% during the festive period, while traditional e-commerce platforms like Amazon and Flipkart are seeing declines [4][58]. - Food delivery services have shown muted DAU growth, with Domino's being the strongest performer in the food services space [5][66]. - **Management Commentary**: - Mixed sentiments from management across sectors: - Food Services/QSRs reported better-than-expected trends but remain cautious due to a challenging demand environment [6][70]. - FMCG companies faced temporary disruptions due to GST changes but expect recovery in H2 [6][71]. - Fashion retail saw strong festive traction, with expectations of continued momentum into the wedding season [6][70]. - Jewellery companies reported record festive sales, indicating strong confidence in sustaining momentum [6][73]. - Alcohol brands are showing early signs of recovery, with October performing better than previous months [6][74]. Investment Implications - There is insufficient evidence to suggest a broad-based consumption revival in 3Q F26 despite government interventions [7]. - Categories such as jewellery, alcohol, and fast food are showing some festive growth momentum [7]. - Consumer preference for digital channels, particularly Quick Commerce, remains strong [7]. Additional Insights - **Category Performance**: - Essentials like grocery and general merchandise show stable growth, while discretionary categories like electronics and fashion retail are experiencing significant declines [28]. - Liquor and department stores are outperforming other categories, indicating a shift in consumer spending patterns [28]. - **DAU Trends**: - The analysis of DAU growth around Diwali indicates that Quick Commerce is becoming a structural consumption channel, while traditional e-commerce platforms are struggling [58][59]. - **Management Outlook**: - Companies across various sectors are cautiously optimistic about the upcoming months, with expectations of improved performance post-Diwali and during the wedding season [70][72]. This summary encapsulates the key points discussed in the conference call, highlighting the current state of the Indian consumer market, sector-specific insights, and management outlooks.

Summary of Meituan's Conference Call Company Overview - **Company**: Meituan (3690.HK) - **Industry**: E-commerce and Food Delivery Key Points and Arguments Competitive Landscape and Unit Economics - Meituan is confident in achieving long-term EBIT of Rmb1 per order by maintaining a unit economics advantage over peers, driven by: 1. Higher commission revenue per order from increased Average Order Value (AOV) 2. Lower subsidy rates due to a higher-quality user mix 3. Reduced delivery costs per order from greater order density and improved algorithms - The rider cost advantage has narrowed due to increased competition and volume growth during the subsidy war [5][6] Order Volume Growth Projections - Goldman Sachs forecasts a 10% growth in order volume for Q4 2025 and 6% for FY 2026, anticipating a gradual reduction in subsidies post-Singles Day festival [5][6] Instashopping Growth Outlook - Instashopping maintains leading market share in order volume and Gross Transaction Value (GTV), with a projected order volume growth of 31% for Q4 2025, despite a sequentially larger operating loss of -Rmb1.6 billion due to investments for user experience enhancement [5][6] In-store Competition and Margin Trajectory - The in-store segment faces evolving competition, leading to a decline in EBIT margins due to slower liquor demand and reduced spending from fast food chains [6] - Long-term EBIT margin for the in-store, hotel, and travel (IHT) segment is expected to stabilize at 30-35% [6] Overseas Expansion and New Initiatives - Meituan plans to prioritize resource allocation for overseas expansion in Kuwait, UAE, and Brazil, while maintaining investment levels for new initiatives in FY 2026 [6] - Forecasted losses for Keeta's expansion are projected at -Rmb3.9 billion for Q4 2025 and -Rmb8.0 billion for FY 2026 [6] Price Target and Investment Rating - Goldman Sachs maintains a "Buy" rating on Meituan with a 12-month price target of HK$120, indicating a potential upside of 20.5% from the current price of HK$99.55 [12][15] Important but Overlooked Content - Key downside risks include: - Increased competition affecting growth and profit turnaround - Labor cost inflation and operational efficiencies - Food safety concerns and stricter regulations - Higher-than-expected investments in Keeta [8][14] Financial Projections - Group revenue is projected to grow from Rmb337.6 billion in 2023 to Rmb408.1 billion in 2026, with an expected adjusted EBIT margin recovery over the next few years [11][15] Conclusion - Meituan is positioned to leverage its competitive advantages in the food delivery and e-commerce sectors, with a focus on maintaining unit economics and expanding into new markets while managing risks associated with competition and operational costs.

Group 1: Market Outlook - Global investors are returning to explore bottom-up stock opportunities after 4-5 years of being on the sidelines, indicating a shift in foreign investor behavior [2][18] - India's valuations remain elevated, particularly in the autos, consumption, and industrial sectors, but pressure is easing as global markets correct and corporate earnings stabilize [2][18] - The Nifty's latest quarter showed 8-10% PAT growth, but margins remain soft; markets are expected to break out of consolidation only if earnings shift toward higher double-digit growth [6][18] Group 2: Sector Analysis - UBS remains positive on the BFSI sector, recommending a stock-specific approach rather than a PSU versus private lens; both private and PSU banks are seen as strong, with growth differentiation being key [8][18] - In the consumption sector, segments like jewellery and quick commerce are attractive, while some FMCG and auto names appear stretched [10][18] - The power and energy profit pool expansion is underestimated, with private corporate capex steady as a share of GDP, although a repeat of the 2003-07 boom is not expected [11][18] Group 3: Emerging Trends - Quick commerce is viewed as a high-growth area, with improving unit economics and faster dark-store expansion even in smaller markets [13][18] - Traditional auto manufacturers with limited EV exposure may underperform, and caution is advised in this sector [14][18] - India is not yet part of the global AI boom due to a lack of large capex-heavy AI infrastructure players; focus should be on how IT services adapt and which sectors adopt AI fastest [15][18] Group 4: IPO Market - Global investors are cautious but not worried about the exuberance in India's IPO market, viewing it as a small slice of their exposure; participation in IPOs does not significantly impact core investment strategies [16][18] - Despite global uncertainties and high valuations, India's narrative remains strong and diversified, with a bottom-up market approach being more appealing than a concentrated top-down strategy [16][18]

Core Insights - India's digital marketing industry has been historically dominated by Meta and Google, which together account for over ₹50,000 crore in annual advertisement revenue, representing 70-90% of the total market share [2][3] - The rise of retail media, particularly in e-commerce and quick commerce, is beginning to disrupt this duopoly, with companies like Amazon and Flipkart generating significant ad revenues [2][3] - The retail media business in India is estimated to be worth $1.5-2.0 billion in 2024, growing to 18% of the total digital advertising market valued at ₹70,000 crore [3][4] Digital Advertising Landscape - Google and Meta's combined advertisement revenue is over ₹53,000 crore, highlighting their dominance in the digital ad space [2] - Retail media is becoming a crucial component of digital advertising, with brands increasingly valuing ads that lead directly to purchases [3][4] - The Trade Desk is emerging as a key player in the retail data space, providing a cross-platform ad layer that leverages first-party data from various retail platforms [4][5] Retail Media Growth - Retail media is now a routine aspect of online advertising, with platforms like Amazon and Flipkart leading the charge [4][5] - The Trade Desk's retail data product allows brands to target users across multiple platforms, enhancing the effectiveness of advertising campaigns [8][9] - Partnerships with companies like BigBasket, Zepto, and Swiggy are expanding the reach and capabilities of retail data utilization [9][12] Data Utilization - Retail data is seen as a valuable asset for brands, enabling them to tailor campaigns based on consumer behavior across different platforms [6][8] - The potential for retail data to enhance advertising strategies is significant, as it allows for more precise targeting and measurement of campaign effectiveness [10][12] - The growth of online retail in smaller cities is expected to enrich the data available for advertisers, further driving the retail media market [11] Future Outlook - As advertising costs on traditional platforms like Google and Meta rise, brands are likely to shift focus towards retail media and first-party data [15] - The evolving landscape of digital advertising suggests that retail data could become a substantial part of India's digital advertising ecosystem [15]

Core Insights - Zepto has raised $400 million in a funding round led by CalPERS, with participation from existing investors, and plans to go public next year [1] - The startup has experienced significant growth, increasing daily orders from 500,000 to 1.7 million over five quarters [5] - The quick commerce market in India is projected to grow substantially, with estimates reaching $42 billion by 2030 and $100 billion in a decade [8] Funding and Investment - The recent funding round is a mix of primary and secondary investments, indicating strong investor confidence [1] - Zepto has raised a total of $1.3 billion in funding over several months last year, showcasing its aggressive growth strategy [2] Competitive Landscape - Zepto competes with other quick commerce players like BlinkIt, Swiggy Instamart, and Tata-owned BigBasket, all of which are part of publicly listed companies [2] - The company also faces competition from established e-commerce giants like Flipkart and Amazon, which have launched their own quick commerce services [3] Market Trends - The quick commerce market in India is showing positive signs, with a shift towards rapid delivery services for groceries and other products [8] - Startups are exploring verticalized e-commerce offerings, with various players focusing on specific niches such as food delivery and apparel [4] Operational Performance - Zepto's CEO highlighted the company's ability to turn dark stores profitable while acquiring over 10 million new monthly transacting users [6] - Despite challenges, Zepto Cafe has a run rate of over $110 million and is experiencing rapid growth, although operations were paused in 44 cities due to staffing issues [7]

Meituan (3690 HK) Conference Call Summary Company Overview - **Company**: Meituan (3690 HK) - **Sector**: IT Services - **Market Cap**: HKD 573.63 billion (USD 73.7 billion) [7][15] Key Industry Insights - **Food Delivery (FD) Losses**: Expected to peak in Q3 2025 and narrow significantly by Q4 2025. However, increased investment intensity in the market may lead to higher near-term losses [2][11]. - **Competition**: Key competitor Alibaba is focusing on retaining its quick commerce market share, which may prolong the timeline for Meituan's FD to return to profitability [2][4]. Financial Performance and Projections - **3Q25 Expectations**: - Core Local Commerce (CLC) revenue projected to decline by 2% year-over-year (yoy) with operating losses widening to RMB 16 billion. - Food Delivery operating loss forecasted at RMB 20 billion, translating to RMB 2.9 loss per order [5][11]. - **Revenue Growth**: New initiatives revenue expected to grow by 18% yoy, but operating losses are anticipated to widen to RMB 2.35 billion [5]. Market Share and Competitive Position - **Rider Metrics**: - Market share of total rider app sessions increased to 54.9% in September from 53.5% in August [3][19]. - Market share of rider capacity rose to 66.7% in September [3][22]. - **Merchant Metrics**: - Market share of total sessions in quick commerce merchant apps stabilized at 55.5% [3][26]. - Daily Active Users (DAU) market share in merchant apps remained stable at 48.6% [3][28]. Strategic Advantages - **Merchant Coverage**: Meituan has a deep understanding of its 14.5 million annual active merchants, with direct business development teams enhancing responsiveness to merchant needs [4]. - **Technology Adoption**: The implementation of a restaurant management system improves operational efficiency, aiding in order preparation and distribution [4]. - **Membership Upgrades**: Continuous enhancements to membership offerings are expected to yield long-term benefits [4]. Risks and Challenges - **Intensified Competition**: Risks from competitors such as Alibaba, Douyin, and JD may impact market share and profitability [4][33]. - **Investment Impact**: Aggressive investments could pressure margins, and a potential consumption slowdown may further complicate recovery [33]. Valuation and Target Price - **Target Price Adjustment**: Target price reduced from HKD 125 to HKD 114, reflecting a 9.9% upside from the current share price of HKD 103.70 [7][33]. - **Earnings Projections**: Adjusted EPS estimates for 2025 show a significant decline to -1.62 from a previous estimate of -0.27 [8][32]. Conclusion - Meituan maintains a "Buy" rating despite challenges, with expectations of long-term benefits from its strategic investments and competitive positioning in the food delivery and quick commerce sectors [4][33].

Core Insights - PharmEasy is facing significant challenges, including revenue stagnation, high losses, and leadership changes, despite a reduction in losses for FY25 [1][4][11] Financial Performance - PharmEasy reported a loss of INR 1,517 Cr in FY25, which is 40% lower than FY24, but revenue remained flat, indicating limited improvement [4][16] - The company's total borrowings as of FY25 were INR 1,700 Cr, down from a peak of INR 3,358 Cr [16][17] - Revenue from operations in FY25 was INR 5,097.5 Cr, with a significant portion (87%) coming from pharmaceutical and cosmetic sales [20][25] Acquisitions and Growth Strategy - PharmEasy's acquisition of Thyrocare for INR 4,440 Cr (around $600 Mn) in June 2021 was intended to drive profitability, but profits remain elusive four years later [3][17] - The company has made several acquisitions, including Aknamed and Medlife, to diversify its offerings but has struggled to achieve sustainable growth [5][25] Debt and Financial Obligations - A $300 Mn loan from Goldman Sachs at a steep interest rate of 17-18% has contributed to PharmEasy's financial difficulties [6][14] - The company failed to meet key covenants related to this loan, including raising fresh equity capital [15][16] Leadership Changes - Siddharth Shah stepped down as CEO in August 2025, with Rahul Guha from Thyrocare taking over [11][13] - New leadership is expected to address the company's financial challenges, but it remains to be seen if they can steer PharmEasy towards profitability [13][26] Market Position and Competition - PharmEasy's market position has weakened, with competitors like 1MG and NetMeds gaining traction [9][27] - The company's B2B operations have become a significant revenue source, accounting for 56.9% of total revenue in FY25 [20][25] Future Outlook - PharmEasy is considering a potential IPO in FY26, but this will require measurable improvements in financial performance [26][29] - The company's valuation has plummeted from a peak of $5.6 Bn to approximately $456 Mn, raising concerns about its future prospects [17][29]

Summary of China Quick Commerce Deep Dive Industry Overview - The report focuses on the **China quick commerce market**, which has shown significant growth from **RMB 69 billion in 2018** to an estimated **RMB 650 billion in 2023** [5][10] - The market is projected to reach **RMB 4,046 billion by 2030** [7][10] Market Size and Growth - The quick commerce market size has experienced a **CAGR of approximately 60%** from 2018 to 2023 [5] - Year-over-year growth rates are expected to continue, with a forecasted **YoY growth of 80%** in 2023 [5] Market Segmentation - Breakdown of the quick commerce market size in 2023: - **Food, beverage, oil, tobacco, alcohol**: RMB 277 billion (41% of total) - **Daily-use products**: RMB 108 billion (17%) - **Pharmaceuticals**: RMB 96 billion (15%) - **Home appliances**: RMB 50 billion (8%) - **Apparel and footwear**: RMB 40 billion (6%) [10][21] Online Penetration - Online penetration rates for various categories in 2023: - **Food and beverage**: 4% - **Daily-use products**: 5% - **Pharmaceuticals**: 5% - **Home appliances**: 2% [10] Long-term Profit Outlook - The industry is expected to generate **RMB 81 billion in profit by 2030**, translating to a **terminal value of RMB 695 billion** [22][23] - Investment requirements are estimated at **RMB 50-80 billion annually** for several years to achieve these targets [24] Financial Impact on Major Players - Projected financial impacts from investments in food delivery and quick commerce for major companies in 2025: - **JD**: Losses of RMB 13.5 billion to RMB 14.4 billion across quarters - **Alibaba**: Losses ranging from RMB 5.6 billion to RMB 16.8 billion - **Meituan**: Losses between RMB 2.7 billion and RMB 5.7 billion [28] Implications for Conventional E-commerce - A **30% cannibalization** from general merchandise is anticipated, with the quick commerce market GMV projected at **RMB 2.5 trillion** by 2030 [25] Key Takeaways - The quick commerce market in China is rapidly expanding, with significant growth potential and increasing online penetration across various categories - Major players are expected to face substantial financial impacts due to investments in this sector, which may affect their profitability in the short term - The long-term outlook remains positive, contingent on continued investment and market development strategies