Quick commerce race intensifies as Amazon, Flipkart level up
MUMBAI: Amazon and Walmart’s Flipkart have made it clear that they are not going to play on the sidelines in India’s quick commerce battlefield. Big money, aggressive dark store expansion, discounts, cashbacks—everything is on the table. Listed players Eternal—which owns Blinkit—and Swiggy are jittery despite sitting on cash balance worth about Rs 18,000 crore and Rs 15,053 crore respectively, which, analysts at Bernstein said is enough to sustain more than three years of current burn rates. The stock price of Eternal is down nearly 30% from 52- week high while that of Swiggy’s has declined by almost 50% from 52-week high as of Monday’s closing price. This roughly translates to a sell-off of more than $15 billion for the companies, estimates by Bloomberg showed.
The sector, analysts at Emkay said, is in a “land-grab phase,” and the entry of deeppocketed Amazon and Flipkart will keep competition elevated, leading to market share pressure for players focused on unit economics. Swiggy, in fact, is shifting its posture to prioritise unit economics and sustainability over shortterm market share, said analysts at The Knowledge Company (TKC). Last week, Amazon chief Andy Jassy visited India, first time since taking charge as the CEO in 2021, announcing expansion of its quick commerce service Now to more than 300 cities from over 15 locations currently. Eternal and Swiggy’s share price took a hit immediately, falling up to 2% in intra-day trading on Jun 24. Under Jassy, Amazon has set out to build the largest delivery in minutes network, moving fast to make up for the lost ground following a delayed market entry. Flipkart Minutes has covered more than 130 cities in about two years of launch amid mounting pressure posed by Blinkit, Swiggy and Zepto’s market share gain and rapid expansion. Walmart’s new chief John Furner has already visited India in May, taking stock of businesses as both Flipkart and PhonePe prepare for public listings. With a spate of discounts and cashbacks on offer, Amazon Now and Flipkart Minutes are banking on their huge marketplace customer base to fuel quick delivery growth. For Amazon, the strategy is to win back Prime members they had lost to competition for everyday purchases—the firm is targeting areas with high Prime member density to capture high AOV urban consumers, said analysts TKC. “The level of discounting by Amazon and Flipkart in quick commerce has not reached the same level as that of their marketplace businesses and is in line with peers for now.Zepto has the highest discount share,” said Karan Taurani, SVP at Elara Capital. Blinkit leads the market in terms of order volumes with a 46% share. Zepto follows with a 35% share and Instamart at 19%, according to Bernstein. Zepto is heading for a $1 billion IPO with losses of Rs 5,905 crore as of FY26. “We do expect the current competitive intensity to sustain through CY2027 at least…the industry profitability may remain under stress for a longer duration, making access to capital a necessary condition for survival,” said Bernstein analysts. Blinkit now faces a tough choice: pivot to margin-diluting discounts to defend share or hold their premium positioning, said TKC.
