Daybreak - Amazon’s quick-commerce win will be less about speed and more about Prime

Episode Date: September 22, 2026

Make The Ken's Daybreak X First Principles Autumn Playlist here.Amazon Now just crossed $1 billion in annualised gross sales, faster than Zepto did. But it's still miles behind Blinkit, still losing money in India, and still playing catch-up on scale. So why is its latest investment not focused on quick commerce? Because for Amazon, the real fight isn't about who delivers fastest. It's about who can afford to lose money longer, and who has more to sell you than just groceries. Today, host Rachel Varghese digs into Amazon's $300 million infrastructure bet, the food-safety raids exposing cracks in the dark-store model, and why Prime, and not 10-minute delivery, might be Amazon's actual edge heading into festive season.Daybreak is produced from the newsroom of The Ken, India’s first subscriber-only business news platform. Subscribe for more exclusive, deeply-reported, and analytical business stories.

I have something to ask of you before we start. You know, there is a word for the particular kind of autumn season that we experience in India. It's called Sharath. And Tagore came back to it again and again in his work. And it has very little to do with a Hollywood-inspired image that we have of red leaves and yellow leaves and pumpkin-spice latte. Sharath is the season that comes after the rain. The sky suddenly looks bigger, the colors look brighter. if you pass by any riverbank, you will see white cash flowers blooming, glistening in the sunlight.

There is this refreshing feeling that the world has been washed clean. And that is the feeling that we're chasing. For the first time, my colleague and the Ken's CEO, Rohan, who writes our wonderful Sunday newsletter First Principles, and I, from Daybreak, are making an autumn-inspired playlist built by you. So, tell us, what does autumn feel like? where you are. What's the little thing that tells you that it has arrived? And what is the one song that sounds like autumn to you? Tell us why that song matters to you as well. We might read your

answer on daybreak or even feature it on first principles. It won't take more than three minutes, I promise. The link is in the show notes. I can't wait to hear from you. And now on to today's episode. Last week, Amazon Now, Amazon's quick commerce arm, crossed one billion dollars in annualized gross sales. They've not made $1 billion yet. But if you take how much they've been selling over the last few months and project that over the next year, then they will hit a billion. And it actually beats the time Zepto took to hit the same milestone. Zepto is India's first pureplay quick commerce platform and it hit that same annualized number about two to three years. And it actually after launch. Amazon now is doing it in under two. It's no surprise really, because a few months ago,

reports had shown that now had been doubling its orders every quarter. The app is now live in over 60 cities and especially in Tier 2 and Tier 3 cities. The company has also shared its ambitions of pushing rather aggressively into these lower tier downs. Still, Amazon is months behind FlipCard's QuickCommerce app FlipCart Minutes and of course far behind Zepto Blinket and Instamart. In fact, Blinket has currently crossed $2 billion in annualized gross sales, double of where Amazon is at right now. And Amazon now has only about 10 to 14% of the market share at this moment. But even though Amazon is lagging behind the major quick commerce competitors in scale,

its most recent expansion plan isn't focused only on expanding its' cost. QuickCommerce network. The company is reportedly pumping $300 million into an operations network expansion, its biggest ever in the country. And like I said, it's not just about quick commerce. The expansion includes all sorts of delivery stations, fulfillment centers, and about 50% more storage. You see, ever since the quick commerce boom took off, the math has always been about speed and a logistical network of dark stores that enable that speed. But Amazon's Quick Commerce bet right now is actually less about speed

and more about everything else it has to offer. Welcome to Daybreak, a business podcast from the Ken. I'm your host, Tresjerbergeese, and every day of the week, my co-host, Nika Shama and I will bring you one new story that is worth understanding and worth your time. Today is Wednesday, the 23rd of September. Amazon's investment is about offering users

a tiered system of delivery times, not just 10 minutes. From a few minutes to a few hours to the same day and even next day, Amazon's variety of offerings increases the longer you're willing to wait. The platform offers tens of thousands of products for delivery within minutes or hours, over one million on the same day and more than 4 million for the next day. And all of this can be bundled in a single prime subscription to avail free delivery for most orders. Amazon calls Prime the widest selection delivered at the fastest speeds.

If you look at the way that QuickCommerce works right now, this stands out. Companies like Septo, Blinket and Instamart rely on a dense network of dark stores. But these stores are optimized to only store certain products for a certain amount of time. And a delivery fleet optimized to ship mostly within a specific radius of 1.5 to 4 kilometers. Each store is, on average, about 2,000 to 5,000 square feet in size with about 2,000 to 8,000 SKUs. Amazon's warehouse empire, on the other hand, and its years of relationship building with sellers, obviously gives it a much wider catalog

and the flexibility in service time. If you're trying to order, say, an air friar on Amazon, but they don't have it available within minutes, you don't have to leave the app to order it for same day or next day delivery. Plus, you get to save on shipping and avail any other prime-related discounts as well. Faster delivery just becomes a perk on top of everything you can get from Amazon in the first place.

That being said though, Quick Commerce Market Leader Blinket is still far ahead of Amazon. In fact, its parent company, Eternal, is profitable, while Amazon India just posted a loss in FI26 of almost 400 crore rupees. Blinket also had more than 900 million orders in FI26, which is very close to Zepto and Instamart's orders combined. Not just that, Blinket almost made 40,000 crore in revenue, which, is far ahead of Zepto and Instamart's combined revenue from the same year. All three of these giants are fighting over space in the same cramped and expensive residential

areas for the single utility darkstore model. Blinket currently operates more than 2,000 such dark stores, while Zepto and Instamart operate 1,139 and 1,143 stores respectively. But the thing is, that model has a ceiling. One dark store only serves a small real. So, to reach more people, these companies need to build more dark stores and each one comes with its own rent, utilities and staffing costs. Which means every store needs to hit 1,000 plus orders a day just to break even, even as it serves

only a tiny slice of the city. And that turns every purchase into a competition. Companies end up winning customers mainly through pricing and catalog because there's only so many daily needs a person actually has, well, every day. And sustaining that kind of discounting starts to hurt, which is exactly why Zepto and Instamart are still loss-making and Blinket is only recently turned a profit. And these cracks are beginning to show in the lack of quality and maintenance in these dark stores. Last month, a raid was led by the Maharashtra Food and Drug Administration or FTA on 86 establishments that store food for online delivery.

One video from the raid even went viral after allegedly a live rat was found in an ice cream crate in one of Blinkets Kalyan dark stores. We actually even covered this in a daybreak episode where my co-host Niktha spoke about how the FDA finding cockroaches and fungus-ridden vegetables and even a packet of chicken four days past expiry is a result of the quick commerce race working the way it should. When speed is a priority and a supermarket's worth of goods is stuffed into a single 3,000 square foot building, things like cleaning, inventory hygiene and temperature control are the first things that fall off the priority list. The second thing is worker welfare. And we have seen enough delivery worker strikes to know that it is still a problem. Amazon superpower here is that it doesn't have to resort to quality cuts to save money. And it is also not tied up to speed as tightly as. as its competitors are.

And even if it is posting losses of almost 400-0 rupees, that also doesn't affect its ability to invest in itself at all. In fact, its expansion plan costs nearly seven times that number. Also, reportedly, a good chunk of that investment is going into seriously improving employee welfare. Given Amazon's own track record on how it treats its workers, so it remains to be seen how far this investment actually goes. But apart from all that it's investing, it's not like Amazon is playing this game to sell one basket to every user.

It's also selling a higher margin bundle in the form of Prime. And the data currently shows that Prime is enabling people to use now and now is enabling them to use Prime. Stay tuned. Think about the way you interact with QuickCommerce apps. I don't think most of us are loyal to any specific app per se. Even though Blinket is usually my go-to because of the variety, I used to go to Septo when I needed to order.

just a couple things because the cart value for free delivery was just 100 rupees. Sometimes I even use Instamart because it usually has the items that are neither available on Blinket or Zepto. But Amazon Now and FlipCart Minutes currently have the lowest cart values for free delivery at $99. Though for Amazon Now, that $99 cart with free delivery comes only with Prime. Without the Prime subscription, the cart value is still lower than other platforms but at $150. That is probably why Prime members spend three times more on Amazon now than non-prime customers. Because they are getting one of the cheapest cards available along with a bunch of other services in the same subscription. And while Prime members are spending more on Amazon now, Amazon India's country manager Samir Kumar told Ed in an interview that as a quick commerce service starts reaching smaller cities, the company is seeing a healthy growth.

in non-prime customers. He said that they are also converting to prime. In fact, 70% of Amazon's total customer base is from smaller cities and towns. So this audience isn't new for Amazon. It makes sense that Amazon is targeting them more aggressively because these are the areas where Quick Commerce hasn't quite managed to hit density yet. Blinket, for example, its CEO, Al-Bindar Dinsa says, is concentrated in the top 15 to 20 cities.

Amazon, on the other hand, doesn't need to have dark store level density to have a facility or a last mile delivery fulfillment center in a city. In fact, Amazon's continued investment in network expansion has actually enabled same-day deliveries to reach 30% more cities over just the past year. So this is allowing the company to win a customer before the incumbent quick commerce apps arrive, with the next best delivery time and a prime membership before. they can get used to 10-minute delivery. Kumar mentioned in a separate interview that convenience was also never really very important for Amazon and that its focus has always been on the value and selection it offers,

which is what wins Amazon customers, especially during the festive season. And also why the company is focusing on expanding Amazon now to 100 cities over the next couple months before the season begins in full force in November. Amazon gets about 3 billion customer visits during its Great Indian Festival over 30 days and nearly 400 million visits in just the first two days. Based on its own data from last year's festival, its site-wide sales saw more than 1,000 crore rupees in customer savings through various offers and cashbacks.

Even its same and next day prime deliveries saw an almost 30% year-on-year increase in metros and close to 40% in Tier 2 and Tier 3 cities. No wonder why the festive season is so important for Amazon and why it sees so much success during the time because it already offers everything a user would want. Variety, speed and savings. Prime members specifically see the most benefits over the year. On average, a prime customer saved over $3,300 on fast and free deliveries in 2024,

which is more than two times the cost of an annual prime membership that includes access to exclusive deals and discounts every day and for events like Prime Day. Also, it comes with streaming choices on Prime Video, music and even Kindle. And it's not just about customer-facing relationships. Amazon has also had long-standing relationships with its sellers who offer discounts on their own items during sales. Amazon's discounts actually only extend towards cashbacks on Amazon pay, no-cost EMI subsidies, bank card tie-ups and more. all the kinds of offerings that a QuickCommerce app would not be able to offer at scale

without diving deep into their wallets. That being said, the fees that sellers have to pay to the platforms are actually comparable. Quick Commerce charges about 18 to 35% of MRP and Amazon around 25 to 40%. But there's a real difference in how that cause breaks down. A report from Storyboard 18 showed that on Blinket, sellers paid 25,000 rupees per SQ up front just to list, whether the product sells or not. On Amazon, most of what you pay is tight to whether something actually sells. Stuff like fulfillment costs, shipment cost, GST, and you might have to pay a storage fee for

the stuff that doesn't sell. But that's a small price to be paid, especially when you compare it to QuickCommerce, where a seller's product might sit in a Quick Commerce warehouse for days after they've already paid that fixed cost. But on Amazon, the cost of an unsold product is a lot lower. So if eventually D2C sellers find it to be more worth their money to list on Amazon and Amazon now instead of other QuicCommerce brands, the better the relationship Amazon has with its sellers. And the more it can maintain its breadth of offerings, allowing it an edge.

That leaves the company in pretty good shape for the festive season, because that's the time when most people plan their big purchases while also needing household items on the Quick. Right now, Amazon is uniquely positioned to serve, both those needs in the same bundle on the same platform. And while QuickCommerce will win the speed race, Amazon has a better shot at retention. Daybreak is produced from the Newsroom of the Ken, India's first subscriber-focused business news platform. What you're listening to is just a small sample of a subscriber-only offerings and a full

subscription unlocks daily, long-form feature stories, newsletters and podcasts. Head to the Ken.com and click on the red subscribe button on the top of the website. Today's episode was hosted and produced by me, Rachel Verkis and edited by Arnau Prakash.