India’s fast commerce market is booming, with demand more than doubling for some players. But Flipkart and Amazon’s fast-delivery efforts are upping the ante in an already crowded space where profitability remains under pressure.
Flipkart, one of the largest e-commerce players in India, entered fast commerce later than its local rivals such as Blinkit, Swiggy and Zepto. But it has now passed through more than 800 dark stores (distribution centers for online purchases) this week, TechCrunch has learned, and is expected to double that figure by the end of 2026, according to UBS.
The expansion comes as India’s fast-paced retail sector enters a phase of more intense competition. Recent developments include the departure of a co-founder at Swiggy this week. The sector is also seeing companies re-evaluate their strategy amid increasing competition and costs.
The company owned by Walmart made his debut in fast commerce with Flipkart Minutes in August 2024, offering deliveries across categories in just 10 minutes. Since then, the sector has grown rapidly. More than 6,000 dark stores are now in operation, leading to significant overlap between players in major cities and intensifying competition, Bernstein said in a report released earlier this week.
Beyond the big cities
Flipkart’s network in India remains smaller than that of market leader Blinkit, which has more than 2,200 dark stores, according to Bernstein. However, Flipkart is betting on expansion beyond major cities to drive growth. This is different from Blinkit, which plans to grow to 3,000 dark stores by 2027 while focusing on its top 10 cities.
“Flipkart has that Walmart DNA,” said Satish Meena, founder of Gurugram-based consumer analytics firm Datum Intelligence. “Walmart’s DNA is always about expanding the total opportunity for dominance by expanding the market.”
Flipkart is already seeing popularity beyond big cities, with 25-30% of its fast commerce orders now coming from smaller cities, a source familiar with the matter told TechCrunch. Dark store orders also increased about 25% month over month, the person said.
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However, rapid trade growth remains concentrated in large cities. Most demand, Bernstein said, continues to be driven by larger cities, where higher population density allows for faster deliveries and better use of hidden stores, even as expansion in smaller towns accelerates.
This dynamic also supports profitability. India’s eight largest cities have more than 3,800 dark stores operated by the five largest players, of which around 3,600 have the potential to be profitable, according to Bernstein.
“Metropolitan markets obviously have better yield and profitability ratios due to higher throughput,” said Karan Taurani, executive vice president of Elara Capital, a London-based investment bank and brokerage firm. “This business is all about higher throughput, and right now that’s largely coming from metropolitan markets.”
Some analysts, however, see a longer-term opportunity beyond big cities. “Non-metros (smaller towns) can provide a boost if businesses expand beyond grocery and offer a wider range of items at faster speeds,” said Satish Meena of Datum. “Flipkart is betting on it.”
However, it will take time to expand beyond major cities. Fast trading is currently viable in about 125 cities, with dark stores typically taking six to 12 months to reach maturity and profitability, said Aditya Soman, senior research analyst at CLSA, a Hong Kong-based brokerage. Most of the new stores located in smaller towns are still in the ramp-up phase, he added.
Amazon, which between The Indian fast commerce market, in late 2024, soon after Flipkart’s debut, is also ramping up its presence. The e-commerce giant has deployed around 450 to 500 dark stores so far, of which around 330 to 370 are currently operational, according to UBS, to meet the growing demand for faster deliveries.
Pressure mounts on incumbents
Flipkart is not only relying on dark store expansion to compete, but also on aggressive pricing. The company offers some of the highest discounts in the segment – around 23% to 24% across all categories, based on a sample basket analyzed by Jefferies last month – as it seeks to attract users in a market where price and convenience remain the main drivers of demand.
The pressure exerted by such strategies seems to work. Brokerage firm JM Financial recently warned that Swiggy’s fast trading business was caught in an “impasse between growth and profitability” and risks destroying shareholder value, adding that a buyout by a larger, better capitalized player could be the best outcome for investors.
Shares of Eternal, which owns Blinkit, are down about 15% year to date, while Swiggy is down more than 29%, even as Zepto is down. prepares to go public on Indian stock exchanges later this year.
The entry and expansion of large players such as Flipkart and Amazon are reshaping the competitive landscape. “Quick retail is no longer in a start-up phase – it has become a game of big players,” said Ankur Bisen, senior partner at retail consultancy Technopak Advisors.
He added that the industry’s economic situation and limited differentiation could eventually lead to consolidation, as companies compete for the same set of customers in a market where discounts are deep.
Amazon, Flipkart and Swiggy did not respond to requests for comment. Eternal declined to comment, while Zepto said it could not comment due to a period of silence following its stock exchange filing.
