Flipkart and Walmart-owned Amazon are putting pressure on fast-paced commerce startups in India

The flash trade market is booming in India, with demand doubling for some players. But the fast-delivery drive by Flipkart and Amazon raises the stakes in an already crowded space where profitability remains under pressure.

Flipkart, one of India’s largest e-commerce companies, entered the express commerce space later than local competitors like Blinkit, Swiggy and Zepto. But it has now surpassed more than 800 dark stores (online shopping distribution centers) this week, TechCrunch has learned, and is looking to double that by the end of 2026, according to UBS.

The expansion comes at a time when India’s express trade sector is entering a more intense phase of competition. This tension is reflected in recent developments, including: Passing away of one of the co-founders of Swiggy This week, companies are reevaluating their strategy amid rising competition and costs.

The company is owned by Walmart For the first time In express commerce with Flipkart Minutes in August 2024, offering cross-category deliveries in less than 10 minutes. Since then, the sector has expanded rapidly. More than 6,000 dark stores are now operating, creating significant overlap between players in major cities and intensifying competition, Bernstein said in a report earlier this week.

Outside major cities

Flipkart’s network in India is still smaller than that of market leader Blinkit, which has more than 2,200 dark stores, according to Bernstein. However, Flipkart is betting on expansion beyond major cities to drive growth. This is unlike Blinkit, which… It plans to expand to 3,000 dark stores by 2027 Focusing on the top 10 cities.

“Flipkart has that Walmart DNA,” said Satish Meena, founder of Gurugram-based Datum Intelligence. “Walmart’s essence has always been about expanding total opportunities for dominance through market expansion.”

Flipkart is already seeing traction outside major cities, with 25-30% of its express commerce orders now coming from small towns, a source familiar with the matter told TechCrunch. Orders per dark store also increased by 25% month-on-month, the person said.

However, rapid trade growth is still concentrated in major cities. Bernstein said most demand is still driven by larger cities, where higher population densities support faster deliveries and better use of dark stores, even as the pace of expansion in smaller cities picks up.

This dynamic also supports profitability. India’s eight largest cities have more than 3,800 dark stores operated by the top five companies, with about 3,600 of them having the potential to turn a profit, according to Bernstein.

“Metro markets are clearly better in terms of return ratios, better in terms of profitability because of higher productivity,” said Karan Taurani, executive vice president at Elara Capital, a London-based investment bank and brokerage firm. “This business is about increasing productivity, and right now, that is largely coming from the metro markets.”

However, some analysts see a long-term opportunity beyond major cities. “Small, non-metro cities can boom if businesses expand beyond grocery stores and offer a wider range of items at greater speeds,” said Satish Meena of Datum. “Flipkart is betting on it.”

However, expanding beyond major cities will take time. Express commerce is currently viable in about 125 cities, with dark shops typically taking six to 12 months to reach maturity and profitability, said Aditya Soman, senior research analyst at CLSA, a Hong Kong-based brokerage. He added that many of the newer stores in smaller towns are still in the expansion phase.

Amazon which I entered India’s flash commerce market in late 2024, soon after Flipkart’s debut, is also ramping up its presence. The e-commerce giant has rolled out about 450 to 500 dark stores so far, with about 330 to 370 currently operational, according to UBS, as it looks to capitalize on growing demand for faster deliveries.

Pressure mounts on incumbents

Flipkart is relying not only on dark store expansion to compete, but also on aggressive pricing. The company is offering some of the highest discounts in the sector — about 23-24% across categories, based on a sample basket analyzed by Jefferies last month — as it looks to attract users in a market where price and convenience remain the main drivers of demand.

The pressures resulting from such strategies appear to be working. Brokerage firm JM Financial recently warned that Swiggy’s express trading business is unsafe Stuck in the “growth vs. profitability dilemma” He risks destroying shareholder value, adding that a takeover 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 shares are down more than 29%, although Zepto Getting ready 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 commerce is no longer in the startup phase – it has become a game for the big players,” said Ankur Bisen, senior partner at retail consultancy Technopak Advisors.

He added that sector economics and limited differentiation could eventually lead to consolidation, as companies compete for the same set of customers in a discount-heavy 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 the period of silence following its IPO.