Amazon eyes shaking up fast commerce scene in Garden City

Bengaluru – In a bold move to penetrate the fast-evolving “rapid commerce” market in India, Amazon is set to launch a 15-minute delivery service, which will kick off as a pilot program in Bengaluru later this month. This ambitious initiative aims to meet the growing consumer demand for faster delivery services, which has been propelled by the rise of competitors like Swiggy’s Instamart, Zepto, and Blinkit.

Amazon’s Entry into Rapid Commerce

Amazon has long been a dominant player in India’s e-commerce market, but it has been a late entrant into the fast-commerce sector. Rapid commerce, or “quick commerce,” focuses on delivering daily essentials like groceries, snacks, beverages, and personal care products in under an hour—sometimes as quickly as 15 minutes. This model heavily relies on a network of “dark stores,” small, localized warehouses that act as retail hubs for fulfilling online orders.

The company’s new 15-minute delivery service marks its foray into this fast-paced segment, a space already claimed by Indian startups and global companies. Samir Kumar, the country manager for Amazon India, confirmed the pilot program and emphasized that the company’s goal is to deliver the widest selection of products, the fastest delivery speeds, and the best value to every pin-code across the country. While Amazon has not disclosed whether the service will be called Tez—as initially speculated—the focus remains on a streamlined and rapid experience for customers.

The Pilot Program: Bengaluru Takes the Lead

Bengaluru has been chosen as the testing ground for Amazon’s 15-minute delivery program. The city is a tech and innovation hub, making it an ideal location to trial the service before expanding to other regions. However, details about the exact number of dark stores Amazon plans to operate in Bengaluru remain undisclosed. The company has also refrained from revealing other cities that may be included in the experiment, though it is expected that expansion will depend on the results of the Bengaluru pilot.

According to company sources, the decision to roll out the service will hinge on its success in Bengaluru, which will provide valuable data on demand, logistics, and customer response. In the coming months, Amazon will evaluate its operations, determine the scalability of the model, and identify other cities for potential expansion based on the outcomes of the initial program.

A Latecomer to the Market

Amazon’s delayed entry into rapid commerce has raised some eyebrows, particularly since its competitors—Swiggy Instamart, Blinkit, and Zepto—have already gained significant ground in the space. These companies have built extensive networks of dark stores across key urban areas, enabling them to offer ultra-fast delivery times.

When questioned about why Amazon took so long to enter this space, Samir Kumar explained, “For us, we look at what our customers want. Sometimes we take a long time to decide. However, we want to make sure that we create a high-quality product as we get started. Our objective is to ensure that the people or colleagues who will be working on the road are safe and that the safety regulations are appropriate.”

This cautious approach reflects Amazon’s commitment to ensuring a seamless experience for its customers while prioritizing the safety and well-being of its delivery staff.

Amazon Fresh: The Precursor to Rapid Commerce

Amazon has been offering faster delivery for some time through its Amazon Fresh service, which delivers groceries and daily essentials within two hours. The launch of the 15-minute delivery service is an extension of this initiative, aimed at further reducing the delivery time for customers seeking speed and convenience.

While Amazon Fresh primarily focuses on fruits, vegetables, dairy products, and other food items, the new 15-minute service is expected to broaden the range of products available, including household goods, personal care items, and more.

Dark Stores: The Backbone of Rapid Commerce

Dark stores, which have become the backbone of the rapid commerce industry, are key to Amazon’s strategy. These small fulfillment centers are strategically located in high-density urban areas to ensure rapid delivery times. Unlike traditional warehouses, dark stores are optimized for online order fulfillment and are not open to the public.

In the rapid commerce model, dark stores allow companies to keep inventory close to their customers, ensuring that goods can be delivered quickly, often within a matter of minutes. Amazon’s foray into this space will likely see the company tapping into its vast network of existing facilities, alongside setting up new micro-warehouses specifically designed to handle quick commerce operations.

Competitive Landscape: Amazon vs. Competitors

Amazon is entering a highly competitive market, dominated by players like Swiggy’s Instamart, Blinkit (backed by Zomato), and Zepto. These companies have already established a foothold in major cities with their networks of dark stores and are seeing increasing consumer adoption, particularly in metro cities.

• Swiggy Instamart: Swiggy has long been a leader in the quick commerce market, offering deliveries in as little as 15-30 minutes across major cities. The company’s vast network and user base give it a competitive edge.
• Blinkit: Blinkit, acquired by Zomato, is another strong player in this sector, boasting quick delivery times and a strong foothold in urban areas.
• Zepto: Known for its ultra-fast delivery times, Zepto has gained significant traction in the market and is one of the strongest competitors in the race for rapid commerce dominance.

To compete, Amazon will need to leverage its existing logistics infrastructure and customer trust. The company’s vast e-commerce ecosystem and Prime membership program could serve as key differentiators, allowing it to attract and retain customers more easily.

Looking Ahead: Expansion and Future Plans

While the Bengaluru pilot will be crucial in determining Amazon’s future plans for rapid commerce, the company has expressed optimism about the potential of the 15-minute service. If successful, Amazon may expand this service to other key cities, including Delhi, Mumbai, and Hyderabad.

“We already have millions of Prime members who trust us for fast deliveries, and we’re confident they will embrace the convenience of this new service,” Kumar added. As the market for quick commerce continues to grow, Amazon’s ability to scale rapidly will be critical to securing a strong position in the industry.

Amazon’s entry into the 15-minute delivery service represents a significant move in the rapidly growing fast-commerce market in India. The Bengaluru pilot will be a key milestone in understanding the feasibility and scalability of the service. With its vast infrastructure and customer base, Amazon has the potential to challenge existing players and reshape the landscape of rapid commerce in India. The company’s focus on quality, safety, and customer experience will likely determine its success in this highly competitive sector. As Amazon fine-tunes its model, the results of this pilot will provide valuable insights into the future of fast commerce in the country.