Amazon India is racing to launch its quick commerce delivery service, codenamed Tez, by late December or early next year as it looks to join the booming sector that notched up gross sales of about $5.5-6 billion this month led by Blinkit, Zepto and Swiggy Instamart, multiple people aware of the details told ET.
Earlier, the US giant was aiming to roll out the service in the first quarter of 2025 but is now keen to accelerate the process, they added. More so, as it is the only large ecommerce firm without a presence in what is India’s fastest growing online business.
The launch of Tez in India—which is only a working title for the proposed business—will mark Amazon’s first foray into the quick commerce business globally.
According to people briefed on the plans, the matter will be discussed in the next monthly review slated for the first week of December—ahead of its annual Smbhav event.
Company hiring talent for project
There is a lot of work underway with various stakeholders internally and externally, the persons said.
The ecommerce firm is also making fresh hires for the high-priority project in addition to having a core team of employees working on it. Amazon’s India grocery and essentials team described the project as a ‘greenfield, grounds-up initiative for an upcoming and fast-growing ecommerce space in India’, according to a job post.
The final name for the quick commerce service is yet to be decided, sources added.
ET first reported about Amazon’s plans on a quick commerce offering in its edition of August 28.
“They (Amazon) want to launch it sooner than the end of first quarter in India. Quick commerce is where all the action is if you are a meaningful consumer internet platform. They are also following the same model as others—setting up dark stores, figuring out the details of stock-keeping units (SKUs) and categories, and putting logistics infrastructure in place,” another person aware of the matter said. The company is expected to start the service with groceries and daily essentials.
An email sent to Amazon India did not elicit any response till press time Sunday.
While Amazon India has its own delivery network in India, it has also engaged with other logistics players for quick delivery services.
Flipkart—Amazon’s arch-rival in India—launched its quick service, Minutes, before the start of this year’s festive season sales during September-October and has since scaled the service in major cities.
Also in the fray is Tata-owned BigBasket, which has made a shift to the quick model, and has clocked over Rs 900 crore in gross sales last month, people in the know said.
Meanwhile, Tata Digital—which runs Tata Neu—has also rolled out its own quick commerce service Neu Flash, which was first reported by ET on October 28.
Amazon had discussed a potential deal with Swiggy Instamart before the food delivery company listed on the bourses in early November.
The rush of capital into the quick commerce sector has only added to all the platforms scaling their operations aggressively. Last week, Zepto raised another $350 million, adding to its over $1 billion cash-pile while Zomato, parent of Blinkit, has also secured shareholder nod to raise another $1 billion through QIP.
“We expect the quick commerce market size to overtake that of food delivery in 2026 in terms of gross order value (GOV). Given a larger addressable market, despite high competition, we see scope for each player to grow materially over the next 3-5 years. The challenge of growth and market share loss comes when the overall market itself has matured,” Morgan Stanley said in a note earlier this month on quick commerce and Zomato-Blinkit.
“Overall download share of quick commerce apps has increased in the last 6 and 12 months relative to ecommerce apps, as per third party data,” it said.
The report estimated a bear and bull case for the quick commerce market at $25 billion and $55 billion, respectively, by 2030. The projections indicate a similar rise in key metrics like households using ultra-fast delivery, monthly transacting users and their frequency of quick orders. Quick commerce is expected to be just under $7 billion in size for 2024.
“In our assumptions, we have assumed that high frequency or high value users would increase from one third to almost half of the total platform and they would account for almost 75-80% of the total value of the business by 2030,” the Morgan Stanley note added on its outlook for 10-30 minute delivery services.
Amazon India changes
Meanwhile, Amazon India has seen a change of guard at the top with company veteran Samir Kumar taking over the India head role following Manish Tiwary’s exit. The local arm of the US firm is also moving its Bengaluru headquarters in January closer to the airport in the city where the total rent outgo will be less.
This is in line with the broader changes in Amazon India where it is looking to curtail costs at various operating metrics. Walmart-owned Flipkart continues to be the market leader in the ecommerce sector besides others like Meesho, Tata Neu and Reliance JioMart also operating in the sector.
In FY24, Amazon’s India marketplace unit posted a 14% jump in operating revenue at Rs 25,406 crore while also cutting losses by 28% during the year to Rs 3,469 crore. While this is higher than the 3% revenue increase in FY23, it still lagged growth rates seen during the pandemic period, when revenue grew by 32% and 49% in FY22 and FY21 respectively.
Its other India units—payments, transportation—saw a modest 7-9% revenue growth while there was a marginal dip in its wholesale business.
