India’s fast commerce market is booming and demand has more than doubled for some players. But the rapid delivery push by Flipkart and Amazon is raising the stakes in an already crowded space where profitability remains under pressure.
Flipkart, one of India’s biggest e-commerce players, entered fast commerce later than its local rivals such as Blinkit, Swiggy and Zepto. But it has now crossed more than 800 dark stores (distribution centers for online shopping) this week, TechCrunch has learned, and is looking to double that number by the end of 2026, according to UBS.
The expansion comes as India’s fast-trade sector enters a phase of more intense competition. The tension is reflected in recent events, including the co-founder exit from Swiggy this week, as companies reevaluate their strategy amid rising competition and costs.
The company owned by Walmart debuted on fast trading with Flipkart Minutes in August 2024, offering deliveries across categories in as little as 10 minutes. Since then, the sector has expanded rapidly. More than 6,000 dark stores are currently in operation, creating significant overlap between players in major cities and intensifying competition, Bernstein said in a report earlier this week.
Beyond the big cities
Flipkart’s network in India remains smaller than that of market leader Blinkit, which has more than 2,200 dark stores, according to Bernstein. However, Flipkart is betting on expanding beyond big cities to drive growth. This is different from Blinkit, which plans to scale to 3,000 dark stores by 2027 while focusing on its top 10 cities.
“Flipkart has this Walmart DNA,” said Satish Meena, founder of Gurugram-based consumer insights firm Datum Intelligence. “Walmart’s DNA is always to expand the total addressable opportunity to dominate through market expansion.”
Flipkart is already seeing traction beyond big cities, with 25% to 30% of its fast commerce orders now coming from small towns, a source familiar with the matter told TechCrunch. Dark store orders have also grown about 25% month over month, the person said.
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However, rapid trade growth remains concentrated in the largest cities. Most demand, Bernstein said, continues to be driven by big cities, where higher population density supports faster deliveries and better utilization of dark stores, even as expansion into smaller cities accelerates.
This dynamic also underpins profitability. India’s eight major cities have more than 3,800 dark stores operated by the five largest players, and around 3,600 of them have the potential to be profitable, according to Bernstein.
“Metropolitan markets obviously have better return and profitability ratios due to higher yields,” said Karan Taurani, executive vice president at Elara Capital, a London-based investment bank and brokerage firm. “This business is all about higher performance and, for now, this is largely coming from metropolitan markets.”
Still, some analysts see a longer-term opportunity beyond big cities. “Non-metropolitan areas (small towns) can see a surge if companies expand beyond groceries and offer a wider range of items at faster speeds,” said Satish Meena of Datum. “Flipkart is betting on that.”
However, scaling beyond big cities will take time. Fast commerce is currently viable in about 125 cities, and dark stores typically take six to 12 months to reach maturity and profitability, said Aditya Soman, senior research analyst at CLSA, a Hong Kong-based brokerage. Many of the newer stores in smaller cities are still in the expansion phase, he added.
Amazon, which entered India’s fast commerce market in late 2024, soon after Flipkart’s debut, is also increasing its presence. The e-commerce giant has set up between 450 and 500 dark stores so far, and between 330 and 370 are currently operational, according to UBS, as it looks to tap into growing demand for faster deliveries.
Increased pressure on incumbents
Flipkart is not only relying on dark store expansion to compete but also on aggressive pricing. The company is offering some of the highest discounts in the segment (around 23% to 24% across all categories, according to a sample basket analyzed by Jefferies last month) as it seeks to attract users in a market where price and convenience remain key drivers of demand.
The pressure of such strategies seems to be working. Brokerage firm JM Financial recently warned that Swiggy’s fast trading business is trapped in a “stagnation between growth and profitability” and risks destroying shareholder value, adding that an acquisition by a larger, better-capitalized player may 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 is falling. preparing to go public on the Indian stock exchanges later this year.
The entry and expansion of big players like Flipkart and Amazon are reshaping the competitive landscape. “Fast trading is no longer in its infancy – it has become a big-player game,” said Ankur Bisen, senior partner at retail consultancy Technopak Advisors.
He added that the sector’s economics and limited differentiation could eventually drive consolidation as companies compete for the same set of customers in a heavily discounted market.
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 period of silence following its IPO filing.
