**Quick-Commerce in India: A Missed Opportunity for Amazon**
*Quick-Commerce Gains Traction*
Quick-commerce, a model that offers instant delivery of various products, is rapidly gaining popularity in India. The top three quick-commerce firms in the country, Zomato’s Blinkit, Zepto, and Swiggy’s Instamart, are projected to achieve annual sales of around $4.5 billion combined. This accounts for a significant portion of Amazon India’s estimated sales of $18 billion. The success of these quick-commerce companies raises questions about how traditional e-commerce giants like Amazon will respond.
*Quick-Commerce’s Impact on E-commerce*
Quick-commerce firms operate in categories such as groceries, household items, kitchen equipment, electronics, and even smartphones. These categories are major drivers of traffic and sales for e-commerce businesses. By capturing a significant market share, quick-commerce companies can negotiate better deals with brands. Furthermore, they are changing the buying behavior of consumers in the top 10 cities in India, according to surveys conducted by Bank of America and Bernstein. Many Amazon customers are shifting to quick-commerce, indicating a growing preference for instant delivery.
*Amazon’s Oversight*
Despite the potential of the quick-commerce market in India, Amazon has overlooked this opportunity. The company has not launched a quick-commerce offering and has even mocked firms that provide fast delivery in its advertisements. This approach appears out of touch as quick-commerce continues to evolve in developing countries like India. Blinkit, which Zomato acquired for less than $600 million in 2022, is now valued at over $13 billion, surpassing the estimated value of Amazon India.
*Competitor Response*
Walmart-owned Flipkart, Amazon’s main rival in India, has responded more swiftly by launching its own quick-commerce service called Flipkart Minutes. This move is seen as an attempt to win over Amazon India’s urban customers. Analysts believe that Amazon’s lack of innovation in the quick-commerce sector is just one of its many setbacks in India. The company has been losing market share for over three years, and its recent leadership change has brought its struggles into focus.
*E-commerce Growth in Smaller Cities*
India’s e-commerce growth is increasingly driven by smaller cities, with a significant portion of customers coming from tier 2 and beyond. Meesho, a social commerce platform, now commands a greater market share in the mobile app space than Amazon does in India. Flipkart’s apps also have a higher number of daily active users compared to Amazon. This shift in consumer behavior highlights the need for Amazon to adapt its strategy to cater to the demands of smaller cities.
*Amazon’s Priorities and Challenges*
Industry insiders suggest that Amazon has shifted its focus in India to prioritize its cloud business under Andy Jassy’s leadership. This strategic shift is evident in the company’s $15 billion investment plan in India, with the majority allocated to AWS operations. In contrast, Walmart and Flipkart continue to invest over $1 billion annually in their e-commerce operations in India. Amazon has also faced challenges with slow merchant adoption and regulatory restrictions in the country, impacting the growth and scalability of its platform.
*Amazon’s Struggle to Bounce Back*
While Amazon has made efforts to expand its offerings in India, such as Amazon Pay and food delivery, it has faced setbacks in these ventures. The company has closed its wholesale distribution business and its foray into online education. Analysts are skeptical of Amazon’s ability to bounce back, as the company has already invested significant capital in a supply-chain system that may not align with evolving consumer shopping habits. Despite these challenges, an Amazon spokesperson claims that the company is India’s most trusted online shopping destination, disputing the information presented in the article.
