India’s quick commerce market: Why Amazon is launching 15 minute deliveries

It has also seen crowding lately, with Amazon’s closest rival Flipkart also starting quick deliveries in certain areas. From makeup to clothes, and iPhones to toasters, everything is fair game in India’s quick commerce market.

Amazon’s quick commerce bet

India is one of the few markets globally where quick commerce companies have found some success, primarily on account of labour cost arbitrage. The cost of carrying out quick deliveries comes out to be considerably cheaper in India than in other countries and regions such as the United States and the European Union, where wages for delivery workers are much higher.

As a result, Amazon wants a share of the growing quick commerce pie in India. The company could also benefit from an already expansive delivery network which spans most pincodes in the country. However, some of its rivals in the quick commerce space have shown that such a network can be built from scratch. Besides, quick commerce is largely a metropolitan, urban phenomena, so any advantage Amazon has in delivering goods to smaller cities may not mean much in this space.

Amazon India saw a churn at the top level, with the exits largely attributed to the company not being able to capitalise on the quick commerce boom in India, despite being in a position to do so. Its India head Manish Tiwary left the firm to join Nestle India as its managing director.

In the financial year 2023-24, Amazon Seller Services, the Indian marketplace entity of the e-commerce company, posted a 14% rise in operating revenue at Rs 25,406 crore. Its net loss narrowed by 28% to Rs 3,469 crore.

India’s crowded quick commerce market

Quick commerce has become one of the most crowded markets in India. Firms like Zomato-owned Blinkit, Swiggy’s Instamart and Zepto control a bulk of the share, with the market opportunity as big as $45 billion, according to investment banking firm JM Financial. In 2019-20, before the COVID-19 pandemic, the gross merchandise value of such firms was less than $1 billion, but has since increased to $3.3 billion in 2023-24, according to advisory firm Redseer.

The rapid increase in the quick commerce market has also forced Flipkart to join the fray with its offering called Minutes, and even beauty and clothing e-tailers like Nykaa and Myntra have launched such services. Bigbasket and Retail’s Jio Mart are in the market too.

According to a recent report by Motilal Oswal, Blinkit leads the quick commerce market with a 46% share, followed by Zepto in second place with a 29% share. Swiggy Instamart ranks third, holding a 25% market share.

Financials

Two of the biggest rivals in the quick commerce space – Zomato’s Blinkit and Swiggy Instamart – also happen to be competitors in the food delivery space and at the stock market.

Data show that Blinkit is currently the undisputed leader in the space, with Instamart facing an uphill battle to catch up with its rival. In the second quarter of 2024-25, Blinkit reported a gross order value (GOV) of more than Rs 6,000 crore, with a 5% growth over the previous quarter. In comparison, Instamart’s GOV stood at a little more than Rs 3,000 crore, although the company registered a much higher quarter-on-quarter growth of 425.

While quarterly numbers for Zepto are not available (since it is an unlisted company), in financial year 2022-23 (the latest available report for the company), it reported a 14-fold increase in revenue to Rs 2,024 crore, though its losses widened to Rs 1,272 crore. It has projected surpassing Rs 5,000 crore in sales for FY24.