India’s quick commerce market is experiencing significant growth, with demand rapidly increasing for certain companies. Flipkart and Amazon’s push towards fast deliveries is raising the competitive stakes in this crowded market, where profitability is still challenging.
Flipkart, a major Indian e-commerce firm, entered the quick commerce sector later than rivals such as Blinkit, Swiggy, and Zepto. Nonetheless, it has surpassed 800 dark stores and aims to double this number by 2026, according to UBS.
The sector’s growth has intensified competition, evident from recent changes like a Swiggy co-founder leaving, as companies adjust strategies amid rising competition and costs.
Walmart-owned Flipkart launched Flipkart Minutes in quick commerce in August 2024, promising deliveries in as little as 10 minutes. Now, over 6,000 dark stores operate, causing overlaps among competitors in key cities, said a Bernstein report.
While Flipkart’s network is smaller than Blinkit’s 2,200 dark stores, it intends to expand beyond major cities to fuel growth, unlike Blinkit, which aims for 3,000 dark stores by focusing on top cities.
“Flipkart has this Walmart DNA,” said Satish Meena from Datum Intelligence, noting Walmart’s strategy of expanding market opportunities.
Flipkart is seeing an upswing in smaller towns, with 25–30% of orders from there, and a 25% monthly growth in orders per store.
Nonetheless, quick commerce growth is mostly in big cities, driven by population density that supports quick deliveries and efficient dark store use, according to Bernstein.
This dynamic is crucial for profitability, with the top eight cities housing over 3,800 dark stores from the largest companies, and about 3,600 having potential profitability, as per Bernstein.
“Metro markets have better return ratios and profits due to higher throughput,” said Karan Taurani from Elara Capital.
Still, there’s potential in smaller towns if companies diversify beyond groceries with faster deliveries, said Meena. However, scaling outside big cities takes time, highlighted Aditya Soman of CLSA, as dark stores typically need six to 12 months to become profitable.
Amazon, having entered the market in late 2024 after Flipkart, is expanding, with 450–500 dark stores so far and around 330–370 operational, according to UBS, to meet the rising demand.
Flipkart isn’t solely depending on expanding dark stores to remain competitive; it’s also engaging in aggressive pricing, offering significant discounts to attract users.
Such tactics seem effective. JM Financial warned Swiggy is in a “growth-versus-profitability deadlock,” suggesting a takeover as a beneficial solution.
Meanwhile, shares of Blinkit’s owner Eternal are down 15% this year, Swiggy over 29%, and Zepto is planning an IPO this year.
The entry of giants like Flipkart and Amazon is changing the competition. “Quick commerce is a big players’ game now,” said Ankur Bisen from Technopak Advisors, highlighting potential for eventual consolidation.
Amazon, Flipkart, and Swiggy did not comment, while Eternal declined and Zepto couldn’t comment due to IPO-related silence.