Amazon invests $13B in India as quick commerce battle intensifies

Amazon is spending aggressively to become India's largest delivery-in-minutes network, committing $13 billion in new investment and expanding its quick commerce service to 300 cities as it takes on Blinkit, Zepto and Swiggy Instamart for control of a market that is reshaping how India shops.

Amazon Now has begun offering cashback of as much as Rs 200 on orders above Rs 1,499 and Rs 50 on orders above Rs 399, alongside free delivery and waived platform fees, according to the company's India website. The incentives reflect Amazon's push to onboard customers rapidly after spending years testing different quick delivery models.

"The competitive intensity in this space is going to get worse before it becomes better," a senior internet sector analyst told Moneycontrol. "If you ask Blinkit or Instamart today who their biggest competitor is, it is Amazon."

The e-commerce giant's quick commerce service was processing an estimated 600 to 700 orders per dark store per day as of May, according to Satish Meena of Datum Intelligence. That compares with more than 1,300 for Blinkit, about 1,200 for Zepto, 1,034 for Swiggy Instamart and 900 to 1,000 for Flipkart Minutes. The lower order density means Amazon must drive significantly more demand through each dark store before matching the operating efficiency of incumbents.

Chief Executive Andy Jassy announced the additional $13 billion investment in India through 2030 after meeting Prime Minister Narendra Modi in New Delhi, bringing Amazon's total committed investment in the country to $48 billion. While the latest capital is largely earmarked for artificial intelligence and cloud infrastructure through Amazon Web Services, analysts say it further strengthens the company's financial firepower as it ramps up its India businesses. The expansion builds on an earlier Rs 2,800 crore commitment to strengthen Amazon Now's micro-fulfillment network.

The $15 Billion Market Value Wipeout

The intensifying competition is already showing in market valuations. Eternal Ltd., which owns Blinkit, and Swiggy Ltd. have together lost more than $15 billion in market value from their recent peaks as Amazon and Walmart-owned Flipkart accelerate investments, according to a Bloomberg report. The selloff reflects concerns that a prolonged fight for market share could push profitability further across the sector.

Blinkit has emerged as the first major quick commerce platform to achieve operating EBITDA profitability, while Swiggy has said it is balancing rapid expansion with improving contribution margins. Zepto is preparing for a public listing. Amazon's willingness to spend aggressively could delay profitability timelines across the industry, analysts said.

"If Amazon is taking a portion of the industry's growth, it, by definition, reduces the growth Blinkit and Instamart would have had without this competition," said Ankur Bisen, senior partner at retail and consumer advisory firm The Knowledge Company. "They will have to spend a little bit more. There is no option here."

Quick Commerce Reshapes India's Consumer Economy

The channel shift is transforming how India's largest fast-moving consumer goods companies operate. Britannia Industries now generates about 70 percent of its online sales from quick commerce platforms, a share Managing Director Rakshit Hargave expects to rise to 85 percent as Amazon and Flipkart scale their rapid delivery offerings. Quick commerce contributed 19 percent of Tata Consumer Products' overall revenue in its latest fiscal year, while Hindustan Unilever reported that its quick commerce turnover doubled during the period.

Flipkart, which like Amazon is pushing deeper into tier-II and tier-III cities, plans to open 1,500 micro-fulfillment centers across the country by the end of 2026. Amazon plans to open more than 20 fulfillment centers and over 100 last-mile delivery stations this year.

"Everybody is chasing the same set of customers in the same cities. That is why it is a zero-sum game," Bisen said. "Amazon and Flipkart have deep pockets and a long-term strategic view of India. That should be a matter of concern for independent quick commerce players."

Amazon shares, trading at about 22 times forward earnings, have gained roughly 15 percent over the past 12 months. The company's $48 billion India commitment represents a long-term bet on a market where digital consumption is growing rapidly, though the quick commerce segment remains unprofitable at scale for most players. Jassy said in a recent interview that Amazon Now is "doubling every quarter," suggesting the company sees the investment as a strategic imperative rather than a near-term profit center.

This article is for informational purposes only and does not constitute investment advice.