Walmart-owned Flipkart, Amazon is pushing for India’s fastest-growing e-commerce startup

India’s fast-moving commercial market is booming, with demand more than doubling from other players. But the push for instant delivery by Flipkart and Amazon is raising the stakes in an already crowded landscape where profits remain under pressure.

Flipkart, one of India’s largest e-commerce players has entered the market faster than local rivals such as Blinkit, Swiggy, and Zepto. But it has now crossed more than 800 black shops (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 increase comes as India’s fast-moving retail industry enters a fiercely competitive phase. The difficulty is reflected in recent developments, including the departure of a founder at Swiggy this week, as companies review strategy amid rising competition and costs.

The Walmart subsidiary started its fast-paced business with Flipkart Minutes in August 2024, offering delivery across all categories in 10 minutes. Since then, the industry has grown rapidly. More than 6,000 black shops now operate, leading to greater cooperation between players in major cities and increased competition, Bernstein said in a report earlier this week.

Except for the big cities

Flipkart’s network in India remains smaller than that of market leader Blinkit, which has more than 2,200 black shops, according to Bernstein. However, Flipkart is betting on expanding beyond major cities to drive growth. This is not unlike Blinkit, which plans to increase to 3,000 black shops 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 has always been about maximizing the total opportunity to dominate by expanding the market.”

Flipkart is already seeing an overtaking of big cities, as 25-30% of its e-commerce orders now come from smaller cities, a source familiar with the matter told TechCrunch. Orders from each black shop also grew by about 25% in the month, the person said.

However, rapid commercial growth remains concentrated in large cities. Big demand, Bernstein said, continues to be driven by big cities, where high population density supports faster delivery and better use of black stores, as expansion in smaller cities gathers pace.

That flexibility also supports profitability. India’s top eight cities have more than 3,800 black shops operated by the five biggest players, about 3,600 of which have the potential to make a profit, according to Bernstein.

“Obviously metro markets are better in terms of returns, better in profitability because of higher capital,” said Karan Taurani, senior vice president at Elara Capital, a London-headquartered investment bank and brokerage firm. “This business is about high growth, and right now, it’s mostly from the municipal markets.”

Still, some analysts see a long-term opportunity outside of the big cities. “Non-metro (smaller cities) can provide a boost if companies expand beyond grocery and offer a wider range of things at a faster pace,” said Satish Meena of Datum. “Flipkart is betting on that.”

However, crossing the big cities will take time. Quick Trade currently operates in about 125 cities, and black shops typically take six to 12 months to reach maturity and turn a profit, said Aditya Soman, senior research analyst at CLSA, a Hong Kong-based brokerage. Many new stores in small towns are on the rise, he added.

Amazon, which entered India’s fast-growing e-commerce market in late 2024 shortly after the launch of Flipkart, is also expanding its presence. The e-commerce giant has removed around 450-500 black shops so far, with around 330-370 currently operating, according to UBS, as it looks set to tap into growing demand for fast delivery.

Pressure is mounting on those in power

Flipkart is not only relying on black market expansion to compete but also on aggressive pricing. The company offers the highest discounts in the category – about 23-24% in all categories, based on the sample basket analyzed by Jeffery last month – as it looks to attract users in a market where price and convenience remain the main drivers of demand.

Such strategic pressure seems to be working. Brokerage firm JM Financial recently warned that Swiggy’s fast-moving commercial business is stuck in “sustained growth versus profitability” and risks eroding shareholder value, adding that a takeover by a bigger, better-spending player may be the best outcome for investors.

Shares in Eternal, which owns Blinkit, are down nearly 15% so far this year, while Swiggy is down more than 29%, as Zepto prepares to go public on the Indian stock exchange later this year.

The entry and expansion of major players like Flipkart and Amazon are reshaping the competitive landscape. “Excel trading is no longer in the early stages – it’s a game for big players,” said Ankur Bisen, senior partner at brokerage firm Technopak Advisors.

He added that the sector’s economies of scale and limited diversification could ultimately drive consolidation, as companies compete for the same 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 the quiet period following its IPO filing.