Expansion of Quick Commerce by E-commerce Giants
Major players in horizontal e-commerce, Flipkart and Amazon, are making significant strides in the quick commerce arena. Despite entering the sector later than their competitors, they are swiftly enlarging their networks of dark stores.
This surge in expansion coincides with a strategic deceleration among established players in the 10-minute delivery service, who are now prioritizing profitability over speed.
The emergence of Flipkart and Amazon in quick commerce seems to directly correlate with profitability evaluations at pioneers like Swiggy and the IPO-bound Zepto.
This shift occurs against a backdrop of escalating discourse regarding employment standards in the last-mile delivery sector, particularly concerning the burgeoning instant delivery revenue streams.
Flipkart’s Aggressive Strategy
Walmart-owned Flipkart initiated its quick commerce service, dubbed “Minutes,” in August 2024. So far this year, the e-commerce behemoth has been adding approximately 100 new dark stores monthly.
This vigorous pace is projected to endure until June, potentially increasing its network from the current 750-800 to around 1,200 dark stores. This expansion would position Flipkart’s network on par with both Zepto and Swiggy’s Instamart.
“Minutes is currently operational in 70 cities and aims to expand to approximately 250 cities by June,” a source disclosed.
“The service is witnessing a monthly growth rate of 16-18%, with dark stores averaging 1,000-1,100 orders per day,” they added. Some more established dark stores are even experiencing higher order volumes.
The company is enhancing its urban reach in major cities, where competitors like Blinkit are prevalent, while also penetrating tier-II and tier-III towns.
Market Dynamics and Competitive Landscape
This expansion transpired as Flipkart prepares for a prospective initial public offering later this year, while quick commerce continues to erode traditional e-commerce growth, particularly in high-frequency categories such as groceries and fast-moving consumer goods. At present, Flipkart has not responded to inquiries regarding its strategic direction.
As previously reported by ET, both Amazon and Flipkart intensified their discounting strategies in January, aiming to compete with incumbents like Blinkit, Zepto, and Instamart. This prompted a renewed price war in the fast-evolving sector.
Amazon has also ramped up its Now service, with expectations of surpassing 500 dark stores, having accelerated its expansion since December with the addition of approximately two facilities daily. Amazon’s network reportedly manages between 300,000 and 350,000 orders daily, according to a knowledgeable insider.
Amazon’s Strategic Vision
In response to inquiries, an Amazon spokesperson emphasized the company’s fervent growth ambitions.
“Our rapid scale reflects our commitment to delivering swift and diverse choices in neighborhoods. From essential goods in minutes through Amazon Now to a broader selection available within hours, we aim to meet customer expectations,” they stated.
In December, Amit Agarwal, Amazon’s senior vice-president for emerging markets, mentioned that the firm has experienced substantial traction in cities where its quick commerce services have launched, particularly against competitors like Blinkit, Instamart, and Zepto in a fervently competitive arena for customer engagement in India’s primary urban locales.
Currently, Zepto and Instamart operate approximately 1,100 to 1,150 dark stores each, while the market leader, Blinkit, boasts close to 2,100. The Gurugram-based quick commerce firm has projected expanding to 3,000 dark stores by March 2027, marking a remarkable scale-up for a major player in the domain.
A senior quick commerce executive noted that “Late entrants are facing increased challenges in securing real estate and labor, given the market saturation with four or five contenders in most urban settings. However, Flipkart and Amazon recognize that leadership in quick commerce holds significant strategic value.”
According to Swiggy’s October-December quarter earnings report, the recent expansion of its quick commerce network relied heavily on geographical outreach and densification.
Swiggy’s focus is now on hyperlocal selection, stating that “the availability of capital was never a hindrance to our rollout strategy.”
Future Outlook
The competition is expected to escalate further in 2026, particularly as leaders direct their focus on core customer demographics to stabilize unit economics, while challengers, including Flipkart and Amazon, strive to secure a foothold in an already congested market.
A recent research report from brokerage firm Bernstein anticipates intensified discounting in H1 2026 alongside expansive store rollouts.
Source link: M.economictimes.com.
