Exclusive Report - According to sources, Amazon invests $3 billion to bet on the booming quick delivery service in India

Aditya Kalra/Greg Bensinger

Reuters NEW DELHI/SAN FRANCISCO, Sept 24 - According to two sources, U.S. e-commerce giant Amazon AMZN.O will invest $3 billion to expand its quick commerce business in India by 2030. This marks Amazon’s largest bet on this segment to date, where rivals have already gained traction by rolling out “deliver in minutes” services.

This market, known as “quick commerce” instant delivery, has rapidly emerged, reshaping the shopping habits of urban Indians—from milk and chocolate to iPhones and electronic goods, which were previously only available from brick-and-mortar stores or large e-commerce sites where deliveries often took longer.

Walmart’s WMT.O Flipkart and Amazon—giants that dominate India's e-commerce market—have been latecomers to “quick commerce” (link). According to Datum Intelligence, this $19 billion industry is expected to more than double to $41 billion by 2030.

According to two people with direct knowledge of the plan, Amazon intends to invest $1 billion in quick commerce by the end of 2027, and a further $2 billion by 2030. No media outlet has previously reported on this investment plan.

Amazon declined to comment on the investment size. However, the retailer said its quick commerce business has reached an annualized gross sales run rate of over $1 billion in the past three months, “making it the fastest-growing e-commerce business in Amazon India’s history.”

More small community warehouses

According to the two sources, one focus of the investment plan is adding new small community warehouses to the existing Amazon Now service network, in order to enable fast shipping from these warehouses. Both sources requested anonymity because the plan is confidential.

“Expansion requires capital,” said the first source.

Amazon views India as a key growth market and is increasing its investments there in data centers, cloud services, and e-commerce.

At the same time, Amazon faces strict regulation on foreign e-commerce in India and a pending case in 2024 (link), where the antitrust regulator found Amazon had violated the law by giving preferential treatment to certain sellers, a charge Amazon has denied.

The rise of the sector since 2022 has coincided with mounting concerns over rider safety (link), as delivery riders rush through neighborhoods to fulfill fast orders. In January this year, the Indian government ordered companies to stop (link) advertising such services as “10-minute delivery.”

According to Datum, homegrown Blinkit under giant Eternal ETEA.NS, Swiggy SWIG.NS and soon-to-IPO Zepto together control 77% of the market, with over 4,500 outlets. Walmart’s Flipkart has over 1,000 outlets and an 11% market share.

Amazon’s market share is only 6.2%. The first source said Amazon aims to increase the number of its outlets from about 750 now to about 1,300 by next April.

Focusing on daily essentials poses challenges

The source added that other key investment areas include strengthening store inventory management software, deploying AI tools for demand forecasting, and expanding the product range.

“The focus will be on daily essentials. If a product is unlikely to drive repeat orders, Amazon does not plan to stock it in quick commerce for now,” the person explained, noting why Amazon doesn’t offer iPhones like its rivals in quick commerce.

Bernstein, in a July report, warned that fresh produce alone can’t cover the high costs of quick commerce, as average order values are low, while “non-fresh goods command higher ticket sizes and margins.”

One source said Amazon disagrees with critics who believe it has “missed the boat.” The company hopes to perfect its business model, for example by installing a cold room in every outlet, not just a fridge.

Datum Intelligence founder Satish Meena said it won’t be easy for Amazon to catch up with rivals that offer premium service and have loyal customer bases, but it can tap its website’s customer pool to attract them to try quick delivery.

Amazon Now is integrated into the main Amazon app and for select first-time orders above 499 rupees ($5.20), customers can enjoy a 20% cashback discount. In addition, for some specified customers, orders above 99 rupees ($1) qualify for free delivery.

“Amazon took some time to make up its mind. Now it seems to have realized this is a business model that demands investment,” Meena said. “They’re rolling out discounts, which helps bring existing Amazon users into quick commerce.”

(To facilitate non-English speakers, Reuters provides automated translations of its reporting in several languages. As automated translation may contain errors or lack necessary context, Reuters does not guarantee the accuracy of the translated text and provides it solely for reader convenience. Reuters will not be liable for any harm or loss resulting from the use of its automated translation service.)