Amazon is gearing up to enter India’s booming quick commerce sector with its first-ever rapid delivery service, codenamed Tez. The service, expected to launch by late December 2024 or early 2025, aims to revolutionize the way groceries and daily essentials are delivered in India. This marks Amazon’s first global foray into quick commerce, a segment that has seen explosive growth and fierce competition in recent years.
Accelerating Plans Amid Growing Competition
Initially planned for a first-quarter 2025 launch, Amazon has expedited the timeline for Tez to gain a competitive edge. The quick commerce market in India, currently led by Blinkit, Zepto, and Swiggy Instamart, recorded gross sales of $5.5–6 billion in November 2024. As the only major e-commerce player without a presence in this sector, Amazon is keen to close the gap.
Competitors like Flipkart have already made strides, scaling their quick delivery service, Minutes, across major cities. Tata-owned BigBasket has also pivoted toward a fast delivery model, clocking over ₹900 crore in sales last month. Additionally, Tata Digital’s Neu Flash and other startups continue to intensify competition.
Infrastructure and Hiring in Progress
Amazon’s Tez project involves setting up dark stores, refining stock-keeping units (SKUs), and building logistics networks to support ultra-fast delivery. Internally described as a “ground-up initiative,” the company has a dedicated core team and is actively hiring talent to ensure a seamless rollout.
The service will initially focus on groceries and daily essentials, which account for a significant portion of quick commerce demand. While the final name for Tez has yet to be decided, the project is a high-priority initiative. Updates are expected during Amazon’s December monthly review and its annual Smbhav event.
Why Quick Commerce?
Quick commerce has emerged as India’s fastest-growing online business segment. According to a Morgan Stanley report, the market size is expected to surpass food delivery in terms of gross order value (GOV) by 2026. Projections estimate the quick commerce sector will reach $7 billion in 2024, with long-term forecasts ranging from $25 billion to $55 billion by 2030.
Key metrics, such as monthly transacting users and order frequency, are also expected to rise sharply. By 2030, high-frequency users could account for up to 80% of the total value of the quick commerce business, further underlining the segment’s potential.
Amazon’s Challenges and Strategic Moves
Despite its global dominance, Amazon faces unique challenges in India, where Flipkart leads the e-commerce sector. Other players like Reliance’s JioMart and Meesho add to the competitive landscape. Tez represents Amazon’s effort to diversify and tap into an addressable market with significant growth potential.
The company’s India marketplace unit has already shown resilience, posting a 14% increase in operating revenue for FY24 while reducing losses by 28%. These gains reflect Amazon’s efforts to optimize costs and expand into untapped sectors like quick commerce.
Future Prospects
If Tez succeeds, it could solidify Amazon’s position in India’s e-commerce market and reshape the quick commerce landscape. As the company prepares for launch, its ability to deliver on speed, reliability, and customer experience will be critical in a market where ultra-fast delivery is becoming the norm.
With Amazon’s entry, the quick commerce race in India is set to become even more competitive, promising transformative changes for consumers and the industry alike.
