India’s fast-paced trade market is booming and demand has more than doubled for some players. But Flipkart’s and Amazon’s fast delivery efforts raise the stakes in an already crowded space where profitability remains under pressure.
Flipkart, one of India’s largest e-commerce players, entered e-commerce later than 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 by the end of 2026, according to UBS.
The expansion comes as India’s fast-paced trade sector enters a more intense competitive phase. The strain is reflected in recent developments, including the departure of a co-founder at Swiggy this week, as companies reassess strategy amid rising competition and costs.
The Walmart-owned company debuted in fast-paced commerce with Flipkart Minutes in August 2024, offering cross-category deliveries in as little as 10 minutes. Since then, the sector has grown rapidly. More than 6,000 dark shops are now operating, leading to significant overlap among players in major cities and heightened competition, Bernstein said in a report earlier this week.
In addition to larger cities
Flipkart’s network in India remains smaller than market leader Blinkit, which has over 2,200 dark stores, according to Bernstein. However, Flipkart is banking on expanding beyond major cities to drive growth. This is in contrast to 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 about expanding the total addressable opportunity to dominate by expanding the market.”
Flipkart is already seeing traction beyond major cities, with 25-30% of its quick trade orders now coming from small towns, a source familiar with the matter told TechCrunch. Orders per dark store also grew by about 25% month-on-month, the person said.
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However, the growth in fast-paced commerce remains concentrated in larger cities. The biggest 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 is picking up.
This dynamic also supports profitability. The top eight cities in India account for over 3,800 dark shops operated by the five largest players, with around 3,600 of them having the potential to be profitable, according to Bernstein.
“Metro markets are clearly better in yield ratios, better in profitability because of higher throughput,” said Karan Taurani, executive vice president at Elara Capital, an investment bank and brokerage firm headquartered in London. “This business is about higher throughput and at the moment it’s mainly coming from metro markets.”
Still, some analysts see a long-term opportunity beyond major cities. “Non-metros (small towns) can provide a boost if companies expand beyond groceries and offer a wider variety of goods at faster speeds,” said Datum’s Satish Meena. “Flipkart is betting on it.”
Nevertheless, it will take time to scale beyond the big cities. Quick trading is currently viable in about 125 cities, where dark shops typically take six to 12 months to reach maturity and profitability, said Aditya Soman, a senior analyst at CLSA, a Hong Kong-based brokerage. Many of the newer stores in smaller towns are still in the start-up phase, he added.
Amazon, which entered India’s e-commerce market in late 2024 shortly after Flipkart’s debut, is also increasing its presence. The e-commerce giant has so far rolled out around 450-500 dark stores, with around 330-370 currently operating, according to UBS, as it looks to capitalize on growing demand for faster deliveries.
Pressure mounting on established
Flipkart relies not only on expanding dark stores to compete, but also on aggressive pricing. The company offers some of the highest discounts in the segment – around 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 pressure from such strategies seems to be working. Brokerage firm JM Financial recently warned that Swiggy’s fast-paced trading business is caught in a “growth-versus-profitability impasse” and risks destroying shareholder value, adding that a takeover by a bigger, better capitalized player could be the best outcome for investors.
Shares in Eternal, which owns Blinkit, are down about 15% so far this year, while Swiggy is down over 29%, even as Zepto prepares to list on Indian exchanges later this year.
The entry and expansion of major players like Flipkart and Amazon are reshaping the competitive landscape. “Quick trade is no longer in a start-up phase – it has become a big player’s game,” said Ankur Bisen, a senior partner at retail consultancy Technopak Advisors.
He added that the sector’s economics and limited differentiation could ultimately drive 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 a silent period following its IPO.