Amazon India is accelerating plans to launch its quick commerce service, codenamed Tez, with an expected rollout by late December or early next year. This strategic move will position Amazon directly against well-established players such as Blinkit, Zepto, and Swiggy Instamart in India’s rapidly growing quick commerce sector, which has seen significant growth in recent years. The service, which will initially focus on grocery and daily essentials delivery, is Amazon’s entry into the lucrative quick commerce market.
The Race to Quick Commerce
Quick commerce, also known as Q-commerce, has rapidly become a key sector in India’s e-commerce landscape, with players like Blinkit, Zepto, and Swiggy Instamart making significant strides. These companies have together driven sales to approximately $5.5-6 billion this month alone. Amazon, traditionally a giant in the e-commerce space, has previously been absent from this fast-growing segment. However, it now plans to roll out Tez much earlier than initially anticipated—accelerating its launch, which was originally scheduled for the first quarter of 2025.
The Tez initiative will be Amazon’s first global venture into the quick commerce market. As it stands, Amazon is the only major e-commerce company not yet involved in this rapidly growing sector, despite its extensive presence in the broader online retail market.
Tez: Amazon’s Quick Commerce Offering
Insiders familiar with the launch plans indicated that Amazon’s quick commerce project is progressing quickly. Key meetings are scheduled for the first week of December to review the latest developments. As part of its preparations, Amazon India is assembling a dedicated team for the Tez project, recruiting new talent to support this high-priority venture.
The project is described as a “greenfield, grounds-up initiative,” highlighting Amazon’s strategic focus on establishing a presence in India’s ultra-fast delivery market. While the final branding for the service remains undecided, Tez serves as the working title for the service.
The company is expected to set up “dark stores” — small, strategically located warehouses — as part of its logistics strategy. Tez will initially cater to the growing demand for groceries and essential goods, a category that has seen tremendous interest in India in recent years, particularly in urban centers.
Competition and Market Insights
Amazon’s entry into the quick commerce space will pit it against formidable competitors. Flipkart, its primary rival in India, launched its own quick commerce service, Minutes, in time for the festive sales season in September and October. Tata-owned BigBasket has also transitioned to the quick commerce model, recording over Rs 900 crore in gross sales last month alone.
Meanwhile, Tata Digital, which operates Tata Neu, recently launched its own service called Neu Flash, further intensifying the competition in the sector. This influx of new entrants and investments is rapidly scaling operations across the industry, spurred by significant funding rounds.
Zepto, for instance, recently raised $350 million, adding to its cash reserves exceeding $1 billion, while Blinkit, owned by Zomato, is expected to raise another $1 billion. This infusion of capital has fueled aggressive expansion plans by these companies to capture a larger share of the market.
According to Morgan Stanley, the quick commerce sector is expected to outpace food delivery in terms of gross order value (GOV) by 2026. The market could grow to anywhere between $25 billion and $55 billion by 2030, with increasing demand for ultra-fast deliveries. By 2024, the quick commerce market is projected to reach nearly $7 billion in size.
Amazon India’s Strategic Shifts
In tandem with its Tez project, Amazon India has been undergoing internal restructuring. Samir Kumar, a long-time company veteran, recently took over as the new head of Amazon India, following the exit of Manish Tiwary. Amazon is also shifting its Bengaluru headquarters to a more cost-effective location closer to the city’s airport, reflecting a broader strategy to reduce operational costs while expanding its presence in India.
Despite these changes, Amazon India has posted notable financial growth. In FY24, Amazon India’s marketplace unit saw a 14% increase in operating revenue to Rs 25,406 crore, while reducing losses by 28%. However, its growth still lags behind the explosive figures seen during the pandemic, when revenue increased by as much as 32% in FY22.
Quick Commerce: A Growing Trend
The quick commerce sector, characterized by ultra-fast delivery models catering to groceries, household essentials, and more, is showing no signs of slowing down. With growing competition and new players entering the market, the battle for market share is heating up. As Amazon prepares for the launch of Tez, it will be crucial for the company to refine its logistics, stock management, and customer service models to gain an edge in the fast-paced environment of quick commerce.
Amazon’s push into this sector will likely spark further innovation, as it adapts its e-commerce infrastructure to meet the needs of an increasingly demanding consumer base that expects near-instant delivery. With more players pouring capital into the industry, the quick commerce space is set to experience exponential growth, with multiple platforms vying for dominance in a market that shows immense potential for long-term gains.
Looking Ahead
Amazon’s Tez service is expected to be a game-changer in the Indian e-commerce landscape, providing consumers with an even faster and more efficient way to access everyday goods. While challenges remain in establishing an effective logistics network and maintaining competitive pricing, Amazon’s resources and expertise in e-commerce give it a significant advantage. As the sector matures over the next few years, quick commerce may redefine how consumers shop, with Amazon positioned to be a major player in this evolving space.
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