At present, the craze of ‘quick commerce’ i.e. delivering goods within 10 minutes is at its peak in the Indian retail and tech market. But now a big and dangerous turn has come in this sector. The two biggest giants of the e-commerce sector – Amazon Now and Flipkart Minutes – have tried their best to capture this market.
These giants have started an aggressive ‘price war’ as soon as they entered the market. According to a recent report, while Amazon and Flipkart are showering indiscriminate discounts and cashback offers, the existing leaders of this segment—Blinkit and Swiggy Instamart—are taking a cautious step and are on the front lines to protect their profits.
Blinkit and Instamart away from price war
According to industry officials, a new round of huge discounts has started in India’s quick-commerce sector amid the new efforts of Amazon and Flipkart, but the already existing Blinkit and Swiggy’s Instamart are mostly staying away from this price war due to their focus on earning profits. Market leader Blinkit (which is owned by Eternal) achieved break-even at the operating level in Q3FY26 and reported operating profit in the fourth quarter.
Whereas Instamart is targeting contribution margin break-even in this quarter. Last year, leading quick-commerce platforms raised a number of fees and charges and cut discounts to improve unit economics. But now, discounts, cashback and free offers are once again being seen in the industry as companies are racing to attract and retain customers amid increasing competition.
Price war started here
E-commerce major Amazon’s quick-commerce division ‘Amazon Now’ is offering cashback of Rs 50, 100 and Rs 200 depending on the value of the order, while ‘Flipkart Minutes’ is running a Re 1 deal on fresh vegetables and fruits. Zepto, which is giving tough competition to Instamart for the second place in the industry, is selling some selected non-grocery products for Rs 9. A senior quick-commerce executive, on condition of anonymity, said that two very different games are being played right now. Some companies are focusing on generating customers, while other companies are focusing on sustainable economics.
What does Kotak’s report say?
Explaining Blinkit’s restraint, the person said matching every discount isn’t necessarily the best use of capital for a company with a large user base. The executive further said that after reaching a certain level, each percentage point improvement in margins creates more enterprise value than each percentage point increase in market share. This is where the focus of existing companies has shifted.
Kotak Institutional Equities recently said in a report that there is tough competition regarding prices in this sector. The report said that Zepto is offering free delivery on a minimum order value of Rs 99-149, Amazon is offering price discounts and cashback, while Flipkart is offering a discount on a minimum order value of Rs 299. “Blinkit seems to be the most disciplined in terms of SKU prices, cart discounts and platform fees. Instamart is also offering lower discounts compared to new entrants.?
Plan to expand Amazon Now to 300 cities
In an interview with ET on June 8, Amazon India country manager Sameer Kumar said the company is aiming to become the market leader in quick commerce. During CEO Andy Jassy’s visit to India last week, Amazon announced plans to expand ‘Amazon Now’ to 300 cities, three times more than the target of 100 cities set two months ago. An investor keeping an eye on this sector said that we have seen all this before with Blinkit, Zepto and Instamart.
When you are in the phase of expansion, you cannot just open a dark store and expect the demand to come automatically. Those stores need to be used, which means you need customers who order frequently. That is why companies spend heavily on discounts, free offers and performance marketing. Amazon and Flipkart are currently at this stage.
What are the companies planning?
Blinkit plans to expand its network to 3,000 dark stores by March 2027. Amazon’s target is 1,000 stores, while Flipkart aims to reach 1,500 stores in the next few months. Zepto and Instamart, which both operate more than 1,100 dark stores, have slowed down their aggressive strategy of rapidly expanding their networks. Satish Meena, founder of Datum Intelligence, said that Blinkit customers no longer just want huge discounts. The company is expanding its dark store network to sell a wider variety of goods and increase stock-keeping units (SKUs), which helps retain customers.
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