Amazon to invest US$3 billion in India quick commerce by 2030
US e-commerce retailer Amazon will invest US$3 billion to expand its India quick commerce business by 2030, two sources said. The planned investment, which has not been previously reported, targets adding small neighbourhood warehouses and boosting inventory management.
NEW DELHI/SAN FRANCISCO: US e-commerce retailer Amazon will invest US$3 billion to expand its India quick commerce business by 2030, two sources said, its biggest bet yet on a sector where rivals have raced ahead by popularising deliveries within minutes.
The instant deliveries sector, dubbed "quick commerce", has become a rapidly growing force and reshaped how urban Indians shop for everything from milk and chocolates to iPhones and electronics. Walmart's Flipkart and Amazon, which dominate India's e-commerce space, are late entrants in quick commerce. The US$19 billion sector is set to more than double in size to US$41 billion by 2030, according to Datum Intelligence.
Amazon plans to invest US$1 billion in the quick commerce sector by the end of 2027, and another US$2 billion by 2030, two people with direct knowledge of the plans said. Amazon declined to comment on the planned investment numbers. The retailer, however, said its quick commerce business has crossed US$1 billion in annualised gross sales over the past three months, "making it the fastest-growing e-commerce business in Amazon India's history."
A key focus of the planned investment will be adding new small neighbourhood warehouses to the current Amazon Now service network from where deliveries are shipped quickly, said both sources, who declined to be identified as the plan is confidential. The first source said Amazon was targeting around 1,300 stores by April next year, from around 750 now. Domestic giants Eternal's Blinkit, Swiggy and IPO-bound Zepto control 77 per cent of the market, together operating more than 4,500 stores, while Walmart's Flipkart has more than 1,000 and an 11 per cent market share, Datum data shows. Amazon has only a 6.2 per cent market share.
The other key areas of spending, the first person added, will be strengthening inventory management software at stores, deploying AI tools for demand prediction and expanding product selection. "The focus will be daily essentials. If the order is unlikely to be repeated, Amazon does not plan to stock it right now in quick commerce," said the person, explaining why Amazon does not stock iPhones like its quick commerce rivals. Bernstein in a July note warned that groceries alone cannot cover the high costs of quick commerce as average order values are low, and "non-grocery items carry higher prices and higher margins."
Amazon does not agree with critics who say it missed the bus, one of the sources said. The company wanted to get the model right, such as having a cold storage room in each store and not just a refrigerator. Satish Meena, founder of Datum Intelligence, said it will not be easy for Amazon to catch up with rivals who offer quality service and have loyal customers, but it could lure their shopping website customers to fast deliveries. "It took some time for Amazon to commit. There appears to be a realisation that this is a model they have to invest in," Meena said. "They are doing discounts, which can help lure current Amazon customers to quick commerce."
