India’s rapid commerce market is booming, with demand more than doubling for some players. But Flipkart and Amazon’s push for faster delivery is raising the stakes in an already crowded space where profitability remains under pressure.
Flipkart, one of India’s largest e-commerce players, entered quick commerce later than local competitors such as Blinkit, Swiggy, and Zepto. However, TechCrunch reported this week that it has surpassed 800 dark stores (online shopping distribution centers), and plans to double that by the end of 2026, according to UBS.
This expansion comes as India’s fast commerce sector enters a more competitive phase. Recent developments, including the departure of Swiggy’s co-founder this week, reflect the tension as companies reassess their strategies amid rising competition and costs.
The Walmart-owned company debuted in the fast commerce space with Flipkart Minutes in August 2024, offering delivery across a variety of categories in 10 minutes. Since then, the field has expanded rapidly. Bernstein said in a report earlier this week that there are now more than 6,000 dark stores in operation, creating significant overlap and increasing competition among businesses in major cities.
Beyond major cities
According to Bernstein, Flipkart’s Indian network is still smaller than market leader Blinkit, which has over 2,200 dark stores. However, Flipkart is betting on expanding beyond major cities to boost growth. This differs from Blinkit, which plans to expand its dark stores to 3,000 by 2027 while focusing on the top 10 cities.
“Flipkart has the Walmart DNA,” said Satish Meena, founder of Datum Intelligence, a Gurugram-based consumer insights company. “Walmart’s DNA has always been about expanding the market and the overall opportunity to dominate.”
Flipkart is already seeing traction beyond major cities, with 25-30% of its rapid commerce orders now coming from small towns, sources familiar with the matter told TechCrunch. Officials reported that the number of orders per dark store also increased by about 25% compared to the previous month.
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However, rapid commerce growth is still concentrated in large cities. Bernstein said most demand continues to be driven by large cities, which support faster delivery and better utilization of dark stores, even as higher population densities accelerate expansion into smaller towns.
This dynamism also supports profitability. According to Bernstein, India’s top eight cities have more than 3,800 dark stores operated by the five largest companies, of which about 3,600 have the potential to become profitable.
“The metro market clearly has better returns and is more profitable due to higher throughput,” said Karan Taurani, vice president at Elara Capital, a London-based investment banking and brokerage firm. “The business is about higher throughput, and right now it’s primarily coming from the metro market.”
Still, some analysts see long-term opportunities beyond major cities. “Even non-metro cities (smaller cities) could see a surge if companies expand beyond grocery stores and offer a wider range of items at a faster pace,” said Satish Meena of Datum. “Flipkart is betting on that.”
Still, expanding beyond big cities will take time. Aditya Soman, senior research analyst at Hong Kong-based brokerage CLSA, said quick commerce is currently viable in about 125 cities and that dark stores typically take six to 12 months to reach maturity and profitability. He added that many new stores in small towns are still in the expansion phase.
Amazon, which entered the Indian quick commerce market in late 2024 immediately after the launch of Flipkart, is also consolidating its position. The e-commerce giant has launched about 450 to 500 dark stores so far, with about 330 to 370 currently operating, according to UBS. This is as we look to meet the growing demand for faster deliveries.
Increasing pressure on existing companies
Flipkart is not only relying on dark store expansion to compete, but is also relying on aggressive pricing. The company is offering the highest discounts across categories, around 23 to 24 percent, based on a sample basket analyzed by Jefferies last month to attract users in a market where price and convenience remain key drivers of demand.
The pressure of that strategy seems to be working. Brokerage JM Financial recently warned that Swiggy’s quick-commerce business is stuck in a “growth vs. profitability impasse” and risks destroying shareholder value, adding that an acquisition by a larger, better-capitalized company could be the best outcome for investors.
Shares of Eternal, which owns Blinkit, are down about 15% so far this year, while Swiggy is down more than 29% even as Zepto prepares to list on Indian stock exchanges later this year.
The entry and expansion of large players such as Flipkart and Amazon are reshaping the competitive landscape. “Rapid commerce is no longer a startup. It has become the game of the big players,” said Ankur Bisen, senior partner at retail consulting firm Technopak Advisors.
He added that the sector’s economics and limited differentiation could eventually drive consolidation as companies compete for the same customer segments in discount-heavy markets.
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 quiet period following the IPO filing.
