Amazon and Walmart-backed Flipkart put pressure on India’s quick-commerce startups

India's quick-commerce sector is experiencing rapid growth, with demand surging across several players. However, the aggressive expansion into fast delivery by Flipkart and Amazon is increasing competition in an already crowded market where profitability remains a key challenge.

Flipkart, one of the country's largest e-commerce platforms, entered the quick-commerce segment later than established rivals such as Blinkit, Swiggy, and Zepto. Despite its delayed entry, the company has now surpassed 800 dark stores — specialised fulfilment centres designed for rapid online deliveries.

The expansion comes as India's quick-commerce industry moves into a more competitive phase. Recent developments include the exit of a co-founder at Swiggy, alongside broader strategic reassessments across companies as they deal with rising operational costs and intensifying competition.

Backed by Walmart, Flipkart entered the segment with Flipkart Minutes in August 2024, offering deliveries across multiple categories in as little as 10 minutes. Since then, the industry has expanded significantly, with more than 6,000 dark stores now operational. This rapid growth has led to overlapping service areas in major cities, further intensifying competition, according to a report by Bernstein earlier this week.

Expansion beyond major cities

Flipkart's network still trails Blinkit's, which operates over 2,200 dark stores, according to Bernstein's estimates. However, Flipkart is pursuing a different growth strategy by focusing on expansion into smaller cities and towns. This contrasts with Blinkit's approach, which targets scaling to 3,000 dark stores by 2027 while concentrating on its top 10 urban markets.

"Flipkart has this Walmart DNA," said Satish Meena, founder of Gurugram-based consumer insights firm Datum Intelligence. "Walmart's DNA is always about expanding the total addressable opportunity to dominate by expanding the market."

The strategy appears to be gaining traction, with approximately 25% to 30% of Flipkart's quick-commerce orders now coming from smaller towns, according to a source familiar with the matter. Additionally, orders per dark store have reportedly increased by around 25% month-on-month.

Despite this momentum, demand remains largely concentrated in metropolitan areas. Bernstein noted that major cities continue to drive most of the growth due to higher population density, which supports faster delivery times and better utilisation of infrastructure, even as companies gradually expand into smaller markets.

This concentration also impacts profitability. The top eight cities in India account for more than 3,800 dark stores operated by the five largest players, with approximately 3,600 of those locations having the potential to achieve profitability.

"Metro markets obviously are better in return ratios, better in profitability because of higher throughput," said Karan Taurani, executive vice president at Elara Capital. "This business is all about higher throughput, and for now, that is coming largely from metro markets."

At the same time, some analysts see long-term potential in non-metro markets. "Non-metros can give a surge if companies expand beyond groceries and offer a wider range of items at faster speeds," Meena said, adding that Flipkart is clearly positioning itself for that opportunity.

However, expansion into these markets will require patience. Quick commerce is currently viable in about 125 cities, and new dark stores typically take six to 12 months to reach maturity and profitability, according to Aditya Soman, a senior research analyst at CLSA. Many newer locations in smaller towns are still in their early stages of growth.

Amazon accelerates its presence.

Amazon, which entered India's quick-commerce market in late 2024 shortly after Flipkart, is also scaling its operations. The company has deployed around 450 to 500 dark stores so far, with roughly 330 to 370 currently operational, according to UBS, as it aims to capitalise on rising demand for rapid delivery services.

Pressure builds on existing players.

Flipkart is not relying solely on expansion to compete — it is also leveraging aggressive pricing strategies. The company is offering some of the steepest discounts in the segment, estimated at 23% to 24% across categories based on a sample basket analysis conducted by Jefferies, as it works to attract price-sensitive consumers in a market driven by both cost and convenience.

These tactics are beginning to impact competitors. Brokerage firm JM Financial recently warned that Swiggy's quick-commerce business is facing a "growth-versus-profitability deadlock," suggesting that an acquisition by a larger, well-capitalised company is a likely outcome.

Market performance reflects these pressures. Shares of Eternal, the parent company of Blinkit, have declined by about 15% so far this year, while Swiggy's valuation has dropped by more than 29%. Meanwhile, Zepto is preparing to go public on Indian stock exchanges later this year.

The growing influence of major players such as Amazon and Flipkart is reshaping the industry. "Quick commerce is no longer in a startup phase — it has become a big players' game," said Ankur Bisen, senior partner at retail consultancy Technopak Advisors.

He added that the sector's economics, along with limited differentiation between platforms, could lead to consolidation as companies compete for the same customers in a market heavily driven by discounts.

Amazon, Flipkart, and Swiggy did not respond to requests for comment. Eternal declined to comment, while Zepto said it could not respond due to a quiet period following its IPO filing.