Amazon to pour $3 billion into India quick commerce push - report

Amazon plans to spend $3 billion to boost its quick-commerce operations in India by 2030, according to Reuters. The investment is the largest move yet into a market dominated by rivals such as Blinkit, Swiggy and Zepto, which hold a combined 77% of the market. Amazon will allocate $1 billion by the end of 2027 followed by another $2 billion by 2030, reports said.

The company has not made these figures public before and declined to comment on the exact numbers. However, Amazon confirmed its quick commerce business generated $1 billion in annualized gross sales over the last three months, making it the fastest-growing e-commerce business in Amazon India's history.

Most of the funding will go towards establishing new neighborhood warehouses for Amazon Now network. Sources cited by Reuters say Amazon aims to have roughly 1,300 stores operational by April next year, up from around 750 currently. The company will also focus on inventory management software at stores, AI tools for demand prediction, and expand its product range.

Amazon intends to concentrate on daily essentials and avoid items that are unlikely to be reordered. The report also noted that Amazon will ensure each store has a cold storage room, unlike its rivals, rather than just a refrigerator.

With Amazon holding a 6.2% share of the $19 billion e-commerce sector expected to exceed $41 billion by 2030, the company has a lot of ground to make up. Bernstein warned in July that grocery items alone cannot cover quick commerce's high costs due to low order values, while non-grocery items bring higher prices and margins. However, Amazon could potentially convert its existing shoppers to fast delivery through discounts.

Amazon Now currently offers 20% cashback on select orders over 499 Indian rupees ($5.20) and free delivery over 99 rupees ($1) for certain customers. However, India's government warned in January that companies should stop promoting 10-minute delivery services due to rider safety concerns. Amazon also faces tight regulations for foreign e-commerce companies and a pending 2024 antitrust case where the watchdog found Amazon favored select sellers. Amazon denies these allegations.