India, Feb. 5 -- The rising competition in the quick commerce segment hit the margins of Swiggy Instamart in the third quarter of the ongoing fiscal year (Q3 FY25) as the company stepped up investments to fend off the rivals.

Swiggy Instamart's contribution margin dropped to -4.6% during the quarter under review from -1.9% in the preceding quarter (Q2FY25).

The company attributed this decline to higher growth investments, particularly in user activation, and the expansion of darkstores across multiple regions. It added that increasing competition led to higher customer incentives and increased cost of customer acquisition, leading to the dip in contribution margin.

Notably, the quick commerce segment's adjusted EBITDA margin also slipp...