Feb 25 (Reuters) - India's booming quick-commerce sector

may struggle to maintain its current pace of growth as expansion

beyond major cities remains limited and competition from larger

e-commerce players intensifies, according to a report by Blume

Ventures.

These companies deliver groceries to electronics within

minutes and their market share has grown to $7.1 billion in

fiscal year 2025 from just $300 million in 2022, the venture

capital firm's Indus Valley 2025 report said.

India's "fastest growing industry segment ever", dominated

by the likes of Zomato-owned Blinkit, Zepto and Swiggy

Instamart, logged a 24-fold increase in gross order

value (GOV) in the same period, it said.

However, the segment will soon see its monthly transacting

user (MTU) growth tapering, much like the country's ride-share,

food delivery and e-commerce sectors before, the report warned.

Moreover, the quick-commerce firms face stiff competition

from large e-commerce platforms such as Walmart's ( WMT )

Flipkart, Amazon ( AMZN ) and Reliance, who are

preparing to launch their own quick-commerce operations.

"... while it is not guaranteed they will be able to counter

quick-commerce players, the increased competition will have some

impact on the industry profit pool," the report said.

Additionally, the expanding sector will likely start to

affect the local grocery ecosystem and attract regulatory

measures to check its growth, the report said.

Earlier this month, TVS Capital Funds Chairman Gopal

Srinivasan in an interview to Reuters said that India's

quick-commerce frenzy is a "passing fad" and unsustainable in

the long run.

Blume Ventures was one of the earliest backers of

crisis-laden quick-commerce firm Dunzo, which is reportedly on

the brink of shutdown after a spate of layoffs, founder exits

and unpaid vendor dues.