Amazon launches 15-minute delivery service, challenging local giants in India

In India, Amazon has initiated a pilot program for a quick commerce service aimed at delivering groceries and other items to customers within a remarkable timeframe of 15 minutes or less. This move attempts to position the company within a fiercely competitive market that features established local players like Zomato-owned BlinkIt, Swiggy, and Zepto, who currently hold a significant share in the quick-commerce sector, worth over $6 billion in annual sales. Initially, the service rollout occurs in Bengaluru, marking Amazon's first foray into quick commerce within the Indian market. The quick commerce model, while not finding success in many global locations, is reportedly gaining traction in India. Various retail and internet companies are adapting their supply chain operations to facilitate faster deliveries due to increasing demand for rapid service. Amazon's leap into this segment comes as Flipkart, its major rival in India, introduced its own quick commerce service just a few months earlier, in August. This competitive landscape indicates a heightened focus among leading e-commerce entities towards developing efficient logistics that cater to the fast-paced consumer demands. Amazon has a broad strategy focused on ‘Selection, Value and Convenience’ and aims to build a substantial and profitable presence in India. The company has already committed over $7.5 billion into its Indian operations since entering the market a decade ago. However, despite these investments, the Indian e-commerce sector has only incrementally penetrated the vast $1.1 trillion retail market, achieving less than a 15% year-on-year growth. Analysts predict the growing segment of quick commerce could become a pivotal aspect of the e-commerce landscape in India moving forward. Projections from CLSA estimate substantial growth for quick commerce within the next few years, anticipating a sixfold increase from fiscal year 2024 to fiscal year 2027, aiming for a total market worth of $27 billion. Currently accounting for 3% of the grocery market and 1% of the retail sector, industry experts expect this share to rise to 5% and 2%, respectively, over the next decade. As consumer habits evolve towards quicker service expectations, the quick-commerce format is poised to shape the future of digital shopping significantly in India.