Flipkart and Amazon are aggressively expanding dark stores, pressuring startups like Blinkit and Swiggy in India’s fast-growing quick-commerce market.
Bengaluru: India’s quick commerce market is growing fast. Demand has more than doubled for some companies. But fast delivery from Flipkart and Amazon is making competition harder in an already crowded market.
Flipkart, a large e-commerce company, joined quick commerce later than rivals like Blinkit, Swiggy, and Zepto. But it has now crossed more than 800 dark stores (special distribution centers). It plans to double this number by late 2026, according to UBS (a research firm).
The expansion comes as India’s quick-commerce sector becomes more competitive. A co-founder recently left Swiggy. Companies are also rethinking their plans as competition and costs increase. Flipkart started its quick-commerce service called Flipkart Minutes in August 2024. It offers deliveries in as little as 10 minutes. Since then, the sector has grown rapidly. More than 6,000 dark stores are now operating. This has led to many dark stores opening in the same areas of big cities. Competition has become more intense, Bernstein (another research firm) said.
Flipkart’s network in India is still smaller than Blinkit’s. Blinkit has over 2,200 dark stores, according to Bernstein. But Flipkart is focusing on expansion beyond big cities to grow. This is different from Blinkit, which wants to reach 3,000 dark stores by 2027 while staying focused on its top 10 cities.
“Flipkart has this Walmart DNA,” said Satish Meena, founder of Datum Intelligence in Gurugram. “Walmart always looks to expand the total market opportunity to dominate by growing the overall market.”
Flipkart is already getting more orders from small towns. About 25% to 30% of its quick-commerce orders now come from these areas, a source told TechCrunch. The number of orders per dark store has also grown about 25% each month, the person said.
However, growth in quick commerce is still mostly in larger cities. Most demand continues to come from big cities. Higher population density in these areas allows faster deliveries and better use of dark stores. This trend continues even as expansion into smaller towns speeds up.
Profitability is also linked to this pattern. The top eight cities in India have over 3,800 dark stores run by the five largest players. About 3,600 of these could become profitable, according to Bernstein (a research firm).
“Metro markets are obviously better for returns and profitability because of higher throughput,” said Karan Taurani, executive vice president at Elara Capital in London. “This business is all about higher throughput, and for now, that is coming largely from metro markets.”
Some analysts see a longer-term opportunity in small towns. “Non-metros (small towns) can see a boost if companies expand beyond groceries and offer more types of items at faster speeds,” said Meena. “Flipkart is betting on that.”
However, scaling beyond big cities will take time. Quick commerce is currently working in about 125 cities. Dark stores usually need six to 12 months to become mature and profitable, said Aditya Soman, a senior research analyst at CLSA (a brokerage in Hong Kong). Many newer stores in smaller towns are still growing and not yet profitable, he added.
Amazon, which entered India’s quick-commerce market in late 2024 shortly after Flipkart’s debut, is also expanding its presence. The e-commerce giant has opened around 450 to 500 dark stores so far. About 330 to 370 are currently open for use, according to UBS, as Amazon aims to meet growing customer demand for fast deliveries.
Flipkart is competing not just by adding more dark stores but also through discounts. The company is offering some of the highest discounts in this segment — around 23% to 24% across product categories, based on a sample basket analyzed by Jefferies last month. These discounts help Flipkart attract customers in a market where price and convenience are key reasons people shop online.
Pressure from these competitive strategies seems to be affecting smaller companies. Brokerage firm JM Financial warned that Swiggy’s quick-commerce business faces a “growth-versus-profitability deadlock” and may destroy value for shareholders. JM Financial said the best outcome for investors might be if a larger, better-funded company takes over Swiggy.
Shares of Eternal, which owns Blinkit, have fallen about 15% so far this year. Swiggy’s stock has fallen over 29% during the same period, while Zepto is getting ready to go public on Indian stock exchanges later this year.
The entry and expansion of large companies like Flipkart and Amazon are changing the competitive landscape. “Quick commerce is no longer in a startup phase — it has become a big players’ game,” said Ankur Bisen, a senior partner at retail consultancy Technopak Advisors.
He added that the sector’s economics and limited differences between companies could eventually lead to consolidation. Companies are competing for the same customers in a market with heavy discounts.
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 silent period following its IPO filing.