Amazon’s quick-commerce win will be less about speed and more about Prime

Rachel Varghese (0:00)

I have something to ask of you before we start. You know, there is a word for the particular kind of autumn season that we experience in India. It's called Sharath. And Tagore came back to it again and again in his work. And it has very little to do with the Hollywood-inspired image that we have of red leaves and yellow leaves and pumpkin spice latte.

Sharath is the season that comes after the rain. The sky suddenly looks bigger, the colors look brighter. If you pass by any river bank, you will see white cash flowers blooming, glistening in the sunlight. There is this refreshing feeling that the world has been washed clean. And that is the feeling that we're chasing. For the first time, my colleague and the Ken CEO, Rohin, who writes our wonderful Sunday newsletter, First Principles, and I from Daybreak, are making an autumn inspired playlist built by you.

So tell us, what does autumn feel like where you are? What's the little thing that tells you that it has arrived? And what is the one song that sounds like autumn to you?

Tell us why that song matters to you as well. We might read your answer on Daybreak or even feature it on First Principles. It won't take more than three minutes, I promise. The link is in the show notes. I can't wait to hear from you. And now, on to today's episode.

Rachel Varghese (1:26)

Last week, Amazon Now, Amazon's quick commerce arm, crossed one billion dollars in annualized gross sales. They've not made one billion dollars yet. But if you take how much they've been selling over the last few months and project that over the next year, then they will hit a billion. And it actually beats the time Zepto took to hit the same milestone. Zepto is India's first pure play quick commerce platform and it hit that same annualized number about two to three years after launch. Amazon Now is doing it in under two. It's no surprise really. Because a few months ago, reports had shown that Now had been doubling its orders every quarter. The app is now live in over 60 cities and especially in tier 2 and tier 3 cities. The company has also shared its ambitions of pushing rather aggressively into these lower tier towns.

Still, Amazon is months behind Flipkart's quick commerce app, Flipkart Minutes, and of course, far behind Zepto, Blinkit and Instamart. In fact, Blinkit has currently crossed $2 billion in annualized gross sales, double of where Amazon is at right now. And Amazon Now has only about 10-14% of the market share at this moment. But even though Amazon is lagging behind the major quick commerce competitors in scale, its most recent expansion plan isn't focused only on expanding its quick commerce network. The company is reportedly pumping $300 million into an operations network expansion, its biggest ever in the country. And like I said, it's not just about quick commerce. The expansion includes all sorts of delivery stations, fulfillment centers and about 50% more storage. You see, ever since the quick commerce boom took off, the math has always been about speed and a logistical network of dark stores that enable that speed. But Amazon's quick commerce bet right now is actually less about speed and more about everything else it has to offer.

Welcome to Daybreak. A business podcast from The Ken. I'm your host, Rachel Varghese, and every day of the week, my co-host, Snigdha Sharma and I will bring you one new story that is worth understanding and worth your time. Today is Wednesday, the 23rd of September.

Amazon's investment is about offering users a tiered system of delivery times, not just 10 minutes. From a few minutes to a few hours to the same day and even next day, Amazon's variety of offerings increases the longer you're willing to wait. The platform offers tens of thousands of products for delivery within minutes or hours, over one million on the same day and more than four million for the next day. And all of this can be bundled in a single Prime subscription to avail free delivery for most orders.

Amazon calls Prime the widest selection delivered at the fastest speeds. If you look at the way that quick commerce works right now, this stands out. Companies like Zepto, Blinkit and Instamart rely on a dense network of dark stores. But these stores are optimized to only store certain products for a certain amount of time. And a delivery fleet optimized to ship mostly within a specific radius of 1.5 to 4 kilometers. Each store is, on average, about 2,000 to 5,000 square feet in size, with about 2,000 to 8,000 SKUs. Amazon's warehouse empire, on the other hand, and its years of relationship building with sellers, obviously gives it a much wider catalog and the flexibility in service time. If you're trying to order, say, an air fryer on Amazon, but they don't have it available within minutes, you don't have to leave the app to order it for same day or next day delivery. Plus, you get to save on shipping and avail any other prime related discounts as well. Faster delivery just becomes a perk on top of everything you can get from Amazon in the first place. That being said though, quick commerce market leader Blinkit is still far ahead of Amazon. In fact, its parent company, Eternal, is profitable, while Amazon India just posted a loss in FY26 of almost 400 trillion rupees.