Amazon plans to invest $3 billion in expanding its quick commerce business in India by 2030, according to two people with direct knowledge of the plans, as the US e-commerce giant seeks to close the gap with rivals in the rapidly growing instant-delivery market.
Quick commerce has transformed shopping habits in urban India, offering rapid deliveries of products ranging from milk and chocolates to electronics. The sector has expanded rapidly since 2022 as consumers increasingly turn to platforms promising deliveries within minutes.
$3 Billion Investment Planned By 2030
Amazon and Walmart-owned Flipkart, which dominate India’s traditional e-commerce market, entered quick commerce after several domestic rivals had established themselves in the sector.
India’s $19 billion quick commerce market is expected to more than double to $41 billion by 2030, according to Datum Intelligence.
Amazon plans to invest $1 billion in quick commerce by the end of 2027 and another $2 billion by 2030, according to the two people familiar with the plans, Reuters reports.
Amazon declined to comment on the proposed investment figures. However, the company said its quick commerce business had crossed $1 billion in annualised gross sales over the past three months, “making it the fastest-growing e-commerce business in Amazon India’s history.”
Amazon Now Store Network Set For Expansion
A significant part of the proposed investment will go towards adding small neighbourhood warehouses to the Amazon Now network, which the company uses to fulfil rapid deliveries, the sources said.
“Expansion needs money,” one of the sources said.
Amazon considers India a key growth market and is expanding its data centre, cloud and e-commerce operations in the country.
The company, however, operates under India’s regulations governing foreign e-commerce companies. It also faces a pending 2024 case in which the antitrust watchdog found that Amazon had given preference to select sellers in breach of the law, allegations the company denies.
The rapid growth of quick commerce has also raised concerns over rider safety. In January, the Government of India directed companies to stop promoting their operations as “10-minute” delivery services.
Blinkit, Swiggy And Zepto Lead Market
Blinkit, owned by Eternal, Swiggy and IPO-bound Zepto together control 77% of India’s quick commerce market and operate more than 4,500 stores, according to Datum Intelligence.
Walmart-owned Flipkart has more than 1,000 stores and an 11% market share, while Amazon holds 6.2%.
Amazon is targeting about 1,300 stores by April next year, up from about 750 currently, according to one of the sources.
Apart from expanding its store network, Amazon plans to strengthen inventory management software, deploy artificial intelligence (AI) tools to predict demand and broaden its product selection.
“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,” one of the sources said, explaining why Amazon does not stock iPhones in its quick commerce business unlike some rivals.
Also Watch:
Can Amazon Catch Up With Rivals?
Bernstein said in a July note that groceries alone might not cover the high costs associated with quick commerce because average order values are low and “non-grocery items carry higher prices and higher margins.”
Amazon does not agree with critics who say it missed the bus, according to one of the sources. The company sought to get its operating model right, including having a cold storage room in every store rather than relying only on refrigerators.
Datum Intelligence founder Satish Meena said catching up with established competitors would not be easy because rivals already offer quality service and have loyal customers. However, Amazon could potentially move customers from its existing shopping platform towards faster deliveries.
Amazon Now, which operates within the main Amazon app, is offering 20% cashback on some initial orders above ₹499 and free delivery on orders above ₹99 for select customers.
“It took some time for Amazon to commit. There appears to be a realisation that this is a model they have to invest in,” Meena said. “They are doing discounts, which can help lure current Amazon customers to quick commerce.”
