India’s quick commerce sector is experiencing significant growth, with some companies reporting demand that has more than doubled. However, the aggressive delivery strategies from Flipkart and Amazon are intensifying competition in an already saturated market where achieving profitability remains a challenge.
Flipkart, a major player in India’s e-commerce landscape, has ventured into the quick commerce space later than local competitors like Blinkit, Swiggy, and Zepto. Nonetheless, it has recently surpassed 800 dark stores—distribution centers for online shopping—and aims to double this number by the end of 2026, according to UBS.
This expansion occurs amid a shift in India’s quick commerce sector, which is now facing increased competition. Recent events, such as the exit of a co-founder from Swiggy, highlight the strategic reassessments companies are undertaking in response to rising competition and costs.
Debuting with Flipkart Minutes in August 2024, Flipkart introduced deliveries across various categories in as little as 10 minutes. Since then, the quick commerce landscape has expanded dramatically, with over 6,000 dark stores now operational. This growth has spurred significant overlap among competitors in major cities, intensifying competition, as reported by Bernstein.
Expansion Beyond Major Urban Areas
Despite its rapid growth, Flipkart’s network still lags behind the market leader, Blinkit, which operates more than 2,200 dark stores. Flipkart is focusing on geographical growth beyond urban centers, diverging from Blinkit’s strategy of primarily scaling in its top 10 cities, with a goal of reaching 3,000 dark stores by 2027.
Analyst Satish Meena from Datum Intelligence suggests that Flipkart’s expansion approach reflects its connection with Walmart. He states, “Walmart’s ethos centers on expanding market opportunities to establish dominance.” This strategy appears to be paying off, with approximately 25-30% of Flipkart’s quick commerce orders now originating from smaller towns, highlighting a growing customer base outside of major urban areas.
Nonetheless, the bulk of demand for quick commerce still stems from larger cities. Higher population density enables faster deliveries and optimal use of dark stores, which is crucial for profitability. Bernstein’s analysis indicates that the top eight cities account for over 3,800 dark stores operated by the five leading players, with approximately 3,600 of them positioned for profitability.
Karan Taurani, executive vice president at Elara Capital, emphasizes that metro markets offer better return ratios and profitability due to higher throughput. He notes, “This business thrives on throughput, which is predominantly driven by metro markets at this stage.”
Despite the prevailing concentration of quick commerce demand in major urban centers, some analysts foresee long-term opportunities beyond these markets. Meena notes that expanding product offerings beyond groceries in non-metro areas could provide a significant boost. While Flipkart is strategically investing in this potential, scaling operations in smaller towns will require time and viable profit models.
Amazon, which entered India’s quick commerce scene shortly after Flipkart in late 2024, has also been strengthening its position. The tech giant has launched approximately 450-500 dark stores, with about 330-370 currently active, as it seeks to meet rising demands for expedited deliveries.
Increasing Competitive Pressure on Established Players
To stay competitive, Flipkart is not solely focusing on dark-store expansion; it has also adopted aggressive pricing strategies. Offering discounts of around 23-24% across various categories aims to attract customers in a market where convenience and cost are pivotal. This approach appears effective; JM Financial recently highlighted a concerning “growth-versus-profitability deadlock” faced by Swiggy, indicating that a merger with a financially robust company may be the best option for investors.
The market dynamics have negatively affected the stock performance of key players. Shares of Eternal, the parent company of Blinkit, have fallen by about 15% this year, while Swiggy’s shares have dropped over 29%. In contrast, Zepto is preparing for an IPO on Indian stock exchanges later this year.
The foray and aggressive scaling efforts by substantial players like Flipkart and Amazon are transforming the competitive landscape of quick commerce. Ankur Bisen, a senior partner at Technopak Advisors, notes that quick commerce has transitioned from a startup phase into a realm dominated by larger companies.
Bisen expresses that the sector’s economic environment and limited differentiation among companies may lead to industry consolidation as they vie for the same consumer base in a discount-driven market.
At this time, Amazon, Flipkart, and Swiggy have not responded to requests for comment. Eternal declined to provide a statement, and Zepto noted its inability to comment due to a silent period following its IPO filing.