Amazon’s decision to sidestep the burgeoning quick-commerce sector in India is increasingly viewed as a strategic blunder, as the market for rapid delivery services is expanding at a remarkable pace. Despite the e-commerce giant’s extensive investments and strong presence in India, it has failed to capitalize on the explosive growth in quick-commerce, where competitors are now reaping significant rewards.
In recent years, quick-commerce firms like Zomato’s Blinkit, Zepto, and Swiggy’s Instamart have revolutionized the delivery landscape in India, providing customers with rapid access to groceries, electronics, and other essentials within minutes. These companies are set to achieve combined annual sales of approximately $4.5 billion, a significant portion of Amazon India’s total sales of $18 billion, as estimated by JM Financial.
Amazon’s reluctance to enter the quick-commerce space has allowed its competitors to capture a growing market share. Analysts, such as Rahul Malhotra from Bernstein, note that these quick-commerce firms are increasingly siphoning off traffic and sales from traditional e-commerce platforms, which could lead to a reshuffling of the competitive landscape.
The quick-commerce sector is growing at an impressive rate of over 125%, outpacing the overall e-commerce growth in India, which saw a more modest increase of 11% to 12% last year. This rapid growth in quick-commerce is partly due to its nascent stage, but the potential of this sector is hard to ignore. The category’s ability to drive substantial traffic and sales has positioned these firms to secure better deals with brands and transform buying behaviors, particularly in India’s top cities.
Amazon has notably avoided entering this lucrative market segment and instead opted to critique its competitors’ speed in its advertisements. This strategy appears increasingly disconnected from market realities as Blinkit, acquired by Zomato for under $600 million in 2022, is now valued at over $13 billion, according to Goldman Sachs.
In contrast, Walmart-owned Flipkart has acted more decisively, recently launching its own quick-commerce service, Flipkart Minutes, aiming to capture the urban customer base that Amazon India seems to be losing. Flipkart’s move reflects a broader trend where competitors are actively engaging with the rapid delivery market while Amazon remains on the sidelines.
The broader picture shows Amazon struggling with its market share in India, compounded by the recent resignation of Amazon India’s head, Manish Tiwary. Additionally, competitors like Meesho have made significant strides in tier 2 and smaller cities, commanding a larger market share in mobile app usage compared to Amazon.
