About two years ago, a VC firm evaluated an investment in a quick-commerce startup in India. While the startup showed promise, the firm was concerned that Amazon might enter the market and dominate. After consulting with Amazon’s leadership, they determined that the e-commerce giant had no plans to venture into quick commerce in India.
Amazon Quick-Commerce Proliferates in India
Amazon’s decision to stay out of quick commerce in India is now seen as a significant misstep. The sector is booming, with top firms like Zomato’s Blinkit, Zepto, and Swiggy’s Instamart on track to generate about $4.5 billion in annual sales. This is a quarter of Amazon India’s total sales, estimated at $18 billion by JM Financial.
Amazon Overlooked Market Potential
Quick-commerce firms thrive in categories such as groceries, electronics, and household goods—areas that traditionally drive significant traffic and sales for e-commerce businesses. As these firms grow, they gain leverage with brands and are changing consumer behavior, particularly in India’s top cities.
Amazon Shift in Consumer Behavior
Many consumers, including Amazon’s customers, are transitioning to quick-commerce platforms. Gopal Kolli, founder and CEO of Solara, noted a shift in consumer behavior, with quick-commerce sales growing significantly for many brands.
Amazon’s Lack of Response and Market Impact
Amazon has yet to launch a quick-commerce service in India, opting to mock the concept in advertisements instead. Meanwhile, the market continues to evolve, with Blinkit now valued at over $13 billion—more than half of Amazon India’s estimated worth.
Flipkart Enters Quick-Commerce
Amazon’s chief rival in India, Walmart-owned Flipkart, has launched its quick-commerce offering, Flipkart Minutes, to capture urban customers. Analysts believe Amazon’s slow response in this sector is one of several missteps in India.
Amazon Strategic Shift Under Andy Jassy
Industry insiders suggest that Amazon’s strategy in India has shifted under CEO Andy Jassy, focusing more on its cloud business than e-commerce. This is reflected in Amazon’s announcement to invest $15 billion in India by 2030, with $12.7 billion allocated to AWS operations.
Challenges Facing Amazon in India
Amazon has faced a series of challenges in India, including losing market share and the abrupt resignation of Amazon India’s head, Manish Tiwary. Additionally, the firm lost a high-profile battle to acquire Future Group, India’s second-largest retail chain, to Reliance.
