Amazon targets 1,300 quick commerce stores in India: Report

Amazon plans to invest $3 billion in India’s quick commerce business by 2030, two sources with direct knowledge of the plans told Reuters, in its biggest bet yet on a sector where rivals have taken an early lead with deliveries within minutes.

The planned investment has not previously been reported by Reuters.

Amazon will invest $1 billion in quick commerce by the end of 2027 and another $2 billion by 2030, the two sources said.

Quick commerce has rapidly changed shopping in urban India, with consumers ordering everything from milk and chocolates to iPhones and electronics for fast delivery.

Amazon and Walmart-owned Flipkart, major players in India’s e-commerce market, entered the sector later than rivals. The $19bn quick commerce market is expected to more than double to $41bn by 2030, according to Datum Intelligence.

Amazon said its quick commerce business had crossed $1bn in annualised gross sales over the past three months, “making it the fastest-growing e-commerce business in Amazon India’s history.”

A key part of the planned investment will be the expansion of Amazon Now’s network of small neighbourhood warehouses, the sources told Reuters.

“Expansion needs money,” the first source said.

Amazon sees India as a key growth market and is expanding its data centre, cloud and e-commerce operations in the country.

The company also faces India’s regulations for foreign e-commerce firms and a pending 2024 case in which the antitrust watchdog found that it had given preference to select sellers in breach of the law. Amazon denies the allegations.

Quick commerce has expanded rapidly since 2022, while concerns over rider safety have also increased. In January, the Indian government ordered companies to stop promoting such services as “10-minute” deliveries.

Eternal’s Blinkit, Swiggy and IPO-bound Zepto control 77 per cent of the market and together operate more than 4,500 stores, according to Datum data.

Walmart-owned Flipkart has more than 1,000 stores and an 11 per cent market share. Amazon has a 6.2 per cent share.

Amazon is targeting around 1,300 stores by April next year, up from around 750 now, the first source said.

The investment will also cover inventory management software, AI tools for demand prediction and a wider product selection, the first source said.

“The focus will be daily essentials. If the order is unlikely to be repeated, Amazon does not plan to stock it right now in quick commerce,” the person said.

That is why Amazon does not currently stock iPhones through quick commerce like some rivals.

Bernstein said in a July note that groceries alone cannot cover the high costs of quick commerce because average order values are low. It said “non-grocery items carry higher prices and higher margins.”

Amazon Now operates within the main Amazon app. It currently offers 20 per cent cashback on some initial orders above 499 rupees ($5.20) and free delivery above 99 rupees ($1) for select customers.

(With inputs from Reuters)