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“We are making an important announcement today. We are going to set up 100 dark stores in FY27 for vertical quick commerce. That’s the fourth growth lever that we are investing in,” Abhishek Bansal, co-founder and chief executive officer (CEO) of Shadowfax, said during the Q4 FY26 earnings call.
According to management, vertical quick commerce offers significantly higher value per engagement than horizontal fulfilment, and investors have also tightened their purse strings for the latter. Therefore, building in-house logistics for horizontal players such as Blinkit, Instamart, Flipkart Minutes, and Amazon Now does not make sense.
“We believe 3PL (third-party logistics) is going to be the natural answer for vertical quick commerce,” said Bansal.
Why is Shadowfax betting on quick commerce? According to the management, working with vertical quick commerce companies is more profitable than working with horizontal quick commerce players, as the market is not controlled by one or two large players. Therefore, Shadowfax is not dependent on a single client for revenue in this space.
“Given we are the market leaders over there (vertical quick commerce), we have also been able to maintain pricing as we scale up,” the CEO said.
In its investor presentation, Shadowfax said that revenue from quick commerce deliveries grew 80% year-on-year in FY26, helping the company further cement its position as the top 3PL player in India in this space.
While quick commerce has failed in developed markets such as China and the US, it has been gaining traction in India. A recent report by Inc42 suggests that the Indian e-commerce market is poised to grow from $165 billion in 2026 to $450 billion by 2031, while quick commerce players are expected to clock $68 billion in gross merchandise value (GMV) over the period.
“Vertical quick commerce is the newest game in town. Every category is going the quick commerce way. It has become the go-to lever for digital penetration. We serve young customers seeking premium products across grocery, gourmet food, childcare, and fashion. Even items that had always been offline, including construction materials, spare parts, and hardware, are shifting to 30-minute deliveries,” the Shadowfax co-founder said.
Amazon Shipping & data security concerns: As part of its strategy to drive growth in quick commerce, the company has also partnered with Amazon Now. Shadowfax also expects significant wallet share gains as Amazon’s quick delivery business scales up. This comes at a time when the e-commerce company has also launched its own 3PL service in India called Amazon Shipping.
However, Shadowfax claimed that Amazon’s 3PL service will not succeed in a market like India because of data security concerns.
“We’ve been observing some of these captive arms coming in and trying to build 3PL as a business. There are two kinds of customers. Large enterprises will never work with them because of data security. Small businesses may work with them in the short term, but on peak days and in peak months, I think external customers get massively deprioritised by these supply chains, and that’s why there’s never been a meaningful business,” the CEO said.
How’s AI impacting Shadowfax? The company is also doubling down on AI, increasingly automating slotting, picking and demand forecasting on its platform. It noted that automation of its sorting centres will lead to faster breakeven, while overheads from scaling to new pincodes will also be curtailed through AI. Shadowfax aims to increase its footprint to 17,000 pincodes by Q4FY27, resulting in higher order volumes and market share gains.
“Our strategy is to bring everything under the roof. Be it the last-mile hub, sorting centres or even dark stores in the future, must be self-owned, and you need automation,” Bansal said.
According to Shadowfax, its share in the 3PL market has grown to 27-29% from 8% over the last four years, as it cannibalised the market previously dominated by traditional and “inefficient” players. The company competes with the likes of Delhivery and Shiprocket. As of Q4 FY26, it had a 27-29% share in the 3PL express market. One of the key reasons behind the logistics firm’s growth is increasing contribution from D2C brands. Revenue from its D2C business surged more than 2.5X between FY25 and FY26.
“The interesting fact is that these D2C and SME customers come at significantly higher incremental margins as the pricing is typically 15-20% higher than what we charge as enterprises. So that D2C and SME segments will continue to remain one of the strongest focus for the organisation,” said Bansal.
On the financial front, Shadowfax swung to a profit of Rs 55.8 crore in Q4 FY26 from a loss of Rs 9.9 crore in the year-ago quarter. Revenue from operations skyrocketed 73% to Rs 1,237 crore during the quarter under review, from Rs 712.4 crore in Q4 FY25.
Key operational & financial metrics (Q4 FY26)
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