Why is Amazon late to the quick commerce party?

In today’s episode on 17th September 2025, we tell you why Amazon has entered quick commerce in India, at a time when competition in the space is fierce.

• 0:00Speaker 00

  Hello folks, you're listening to Finshots Daily. In today's episode, we tell you why Amazon has entered quick commerce in India at a time when competition in the space is fierce. But here's a quick side note before we begin. In just a few days, GST on insurance premiums will be gone, making policies cheaper. And while most people will scramble to make sense of it, you can walk in prepared. Join our two-day masterclass where we break down health and life insurance in simple, actionable steps. You'll know exactly what to buy, how much cover you should choose, and what traps to avoid. Click the link in the description to save your spot. Only 300 seats are open and this is your last chance to get clarity before the change. Now, onto today's story.

• 0:46Speaker 00

  Amazon has announced its 10-minute delivery service, Amazon Now, in Mumbai. Now, this feels like a natural step after its launch in Bengaluru and Delhi a few months ago, where daily orders grew 25% month-on-month. And with 100-plus dark stores already in place and plans to add hundreds more by the end of the year, Amazon seems serious. But here's the catch. 2025 feels like a little too late for a quick commerce debut in India. This is already a cutthroat game where players bleed cash to keep customers hooked. To give you a sense, average discounts have doubled in two years, from under 10% of MRP to 20 to 25% today. And because of these heavy discounts, profit margins that are already razor-thin or even negative are shrinking further.

• 1:30Speaker 00

  Numbers from the top two quick commerce players, both backed by listed parent companies, tell the story. Now, take Zomato's Blinket. The market leader with a 52% share. Its revenues jumped 155% year-on-year and 40% quarter-on-quarter in Q1 FY '26 to 2,400 crore rupees. But despite this surge, profits didn't follow. Its operating losses swelled to 162 crores from just 3 crores a year ago. And if you break that down as a percentage of net order value, Blinket's operating margin stood at minus 1.8%. In case you're wondering, in case you're wondering, net order value is basically the total value of all orders after deducting fees and discounts.

• 2:13Speaker 00

  Or, well, look at Instamart, Swiggy's arm with a 25% market share. Its revenues grew 113% year-on-year to 859 crore and 17% quarter-on-quarter. But operating losses ballooned to 896 crore or nearly three times what it lost a year ago. And as a percentage of the NOE, that's a margin of minus 21%, which makes you wonder, why has Amazon shown up this late to the quick commerce party, especially now when players are burning cash to hold their ground? Let's tackle the first question and talk about Amazon's delay to begin with. Look, Amazon is a retail giant as you know it. In India alone, it pulls in over 25,500 crore a year.

• 2:57Speaker 00

  So, running a quick commerce business even with initial losses isn't really a big deal. Its deep pockets mean the American parent can absorb those losses until things turn profitable. But, timing was everything here. When India's quick commerce boomed, Amazon Inc. was wrestling with its own post-pandemic headaches. During COVID, profits doubled as people shopped online in droves. But, Amazon simply couldn't hire or build warehouses fast enough and, once the pandemic erased, shoppers flocked back to physical stores. Inflation didn't help either as it made people more hesitant to spend. And if you dig into Amazon's financials, one particular year, 2022 stands out. It was Amazon's first unprofitable year since 2014.

• 3:41Speaker 00

  The culprit? A massive bet on electric vehicle maker, Rivian. For context, Amazon took a 20% stake, seeing it as a way to electrify its delivery fleet and made its climate pledge. It even committed to buying 1 lakh R pav vans by 2030. But unfortunately for Amazon, that year, Rivian stumbled. It priced cars poorly, missed growth targets and its stock prices crashed 82% in 2022, which also wiped billions off Amazon's books. That forced Amazon to slam the brakes on some projects. It paused growth at Amazon Go and Amazon Fresh, closed a few stores, froze hiring and doubled down on businesses that made money like AWS and digital services.

• 4:25Speaker 00

  And since Amazon India's playbook is tied closely to decisions made in the US, quick commerce wasn't exactly high on its agenda back then. The focus then was recovery and survival. But fast forward to today, Amazon has bounced back to profitability globally and steadied its ship. Which is why it probably feels ready to enter India's quick commerce race, even if the party started without it. Then there's the matter of regulation. India has had strict FDI rules for e-commerce in place since 2016. So foreign-owned players like Amazon could not hold inventory or sell directly to customers. They had to stick to a pure marketplace model that simply connected buyers and sellers. That upended Amazon's playbook.

• 5:08Speaker 00

  It had to rethink how it pushed private labels like Solimo and Amazon Basics. And in that environment, building a direct quick commerce business was pretty much off the table. Sure, a hundred percent FDI was still allowed in marketplaces, but the rules barred them from owning goods, fixing prices, or even letting one seller account for more than twenty-five percent of total sales. The idea was to level the field for smaller Indian businesses. But Amazon and Walmart weren't going to sit still. They worked around it through joint ventures with third-party sellers like Cloudtail, which is now closed, and Apario Retail, which was acquired by Clicktech in 2024, which gave them indirect control. It was technically legal, but again, always under scrutiny.

• 5:51Speaker 00

  Now that those tie-ups have ended, Amazon has more room to set up dark stores for quick commerce, as long as it plays strictly by the marketplace rules. And finally, there's the late mover advantage. Yes, you read that right, late mover advantage. You'd normally think that the first movers have the best shot at making it big and holding their ground in the crowded market. Well, after all, that's what the economics textbook tells us. But an SPJIMR study points out that sometimes arriving late can actually be a blessing. And Amazon's entry into quick commerce feels more like a calculated delay than a misstep. See, when rivals were busy locking themselves into models that worked for an early market, Amazon got to sit back and watch.

• 6:33Speaker 00

  It's seen how wafer-thin margins or even consistent losses broke the backs of well-funded players like Dunzo and Geomart Express. It's seen how customer expectations shifted and where competitors have struggled. And now, it can build for the markets as it is today, not as it used to be. Plus, Amazon brings serious firepower. Its 200 million monthly active users dwarf BlinkIt's 13.7 million and Instamart's 9.8 million. It can offer a seamless experience where shoppers flip between buying instant essentials and everything else they don't need right away. And unlike rivals who are busy chasing city crowds, Amazon has an edge. Its reach go well beyond metros.

• 7:14Speaker 00

  Think of smaller towns where older folks still run the household and may not always be able to step out for essentials, especially with their children working in bigger cities. It's only a matter of time before they get comfortable with quick commerce apps. And if most of them can already use WhatsApp, Facebook or pay through UPI, a simple, easy to use quick commerce app by Amazon could make that leap even easier. Early signs look promising too. Amazon suggests that its Prime members have already tripled their shopping frequency after using Amazon now. And if Amazon leans on quality and variety, not just speed, that could be its real edge. But whether that's enough to take on BlinkIt, Instamart or Flipkart Minutes, backed by American giant Walmart, is something we'll just have to wait and see.

• 7:57Speaker 00

  Thank you for listening to today's episode. And if you want to share your feedback or suggestions, do drop us an email to [email protected]. Until next time.