2026.10.09 | GP | AMZN | Amazon India Quick-Commerce Push

Primary:

SWIGGY:IN

ZOMATO:IN

Zepto Limited

Associated:

AMZN

Flipkart Marketplace

Blink Commerce Private Limited

NYKAA:IN

Viewpoint:

Former Executive

Moderator: Akshatha Kulkarni (AK)

Anubhav Nanda (AN), Former Business Head of Grocery for Amazon Now - Amazon

SUMMARY

Overview

The discussion examined Amazon’s planned multibillion-dollar push into Indian quick commerce and its prospects against Blinkit, Zepto, Swiggy Instamart, Flipkart, and BigBasket. The expert previously led Amazon’s grocery operations and contributed to the development of Amazon Now.

Amazon initially favored scheduled grocery delivery because it questioned the sustainability of ultra-fast fulfillment. Strong consumer adoption later prompted a strategic shift. Amazon Now launched in January 2025 and is now pursuing broad geographic expansion, supported by dark stores, existing Amazon Fresh infrastructure, More Retail locations, franchisees, and established sellers.

Key Insights

The expert believes Amazon intends to win the market rather than remain a marginal participant. Amazon’s model combines delivery in minutes, delivery within several hours, and national same-day or next-day shipping through one application. Expansion and customer relevance are currently more important than near-term profitability. Amazon’s strongest differentiators are customer trust, broad selection, established logistics, basket-level value, and limited add- on fees. Fresh food is considered essential because it drives frequent purchases and can differentiate platforms through quality. The next major expansion phase is expected to focus on cities beyond the current footprint rather than further densification of major metropolitan areas. Amazon views market share across total digital commerce, not quick commerce alone.

Competitive Landscape

10/11/2026 at 11:38 AM UTC

Company

Positioning and advantages

Pressures or limitations

Amazon Now

Integrated delivery pyramid, existing customers and sellers, national logistics, hybrid operating model, and minimal surcharges

Late entrant, lower dark-store order density, and significant expansion costs

Blinkit

Zepto

Established quick-commerce scale and inventory- led operations

Fees may weaken basket-level value; reporting differs from marketplace models

Early ultra-fast delivery entrant with meaningful market share

Faces a larger, well-funded competitor with broader infrastructure

Swiggy Instamart

Established rapid-delivery platform

Profitability remains developing

Flipkart

BigBasket

Strong e-commerce presence and marketplace-led quick commerce

Building toward the broad selection already available through Amazon

Longstanding grocery experience and competitive order values

Historically more regionally concentrated

Quantitative Insights

Metric

Reported potential investment

Planned coverage

Expected dark stores

Current reported presence

Customer reach target

National assortment

Traditional inventory coverage

Detail

$3 billion

300 cities

About 1,800

About 120 cities

Roughly 80% of Amazon customers

About 1 million SKUs

15–20 days

Dark-store break-even benchmark

Approximately 1,700–1,800 daily orders

Reported current share

About 6%

Leading competitor share discussed

Approximately 23%–24%

Profitability planning horizon

Through 2028

Amazon is expected to allocate capital mainly toward network expansion and agricultural supply enablement, followed by

10/11/2026 at 11:38 AM UTC

marketing, customer acquisition, pricing, and promotions. The expert expects profitability timing to resemble industry norms.

AK: Hello, everyone. My name is Akshatha Kulkarni and I'm a senior analyst at Guidepoint Insights covering the APAC consumer sector. I want to welcome you all to our call today on Amazon. Can this $3 billion Indian quick commerce push win sustainable share versus Blinkit, Swiggy, Instamart, Zepto and Flipkart? Today we have with us Anubhav Nanda, who's the former business head of grocery for Amazon. Anubhav, thank you so much for joining us today.

AN: Thank you, Akshatha. Thank you for having me.

AK: Could you please give us some background on your experience before we get started?

AN: Sure. I have about 15 years of experience, 4 of them at Procter & Gamble in the foundational year and then 11 years at Amazon. I have been with Amazon right from the starting when we launched the FMCG categories. And then in my last role, I was heading the Amazon grocery business and a part of that job also meant doing a lot of foundational work for launching Amazon Now, etc. And then we went ahead and launched Amazon Now in January

1. And I was heading that particular team till about March 2026.

AK: Perfect. Thank you for that, Anubhav. To begin a conversation, I first wanted to talk about Amazon's... I mean, I haven't officially confirmed it, but news reports indicate that Amazon is planning to invest $3 billion into the Indian quick commerce space. First, can you help us understand how Amazon is thinking about quick commerce? Because it would seem like they're a pretty late entrant in this space. What kept them away from this space for so long? Why are they planning to or trying to invest more aggressively now?

AN: Sure. Amazon as a company has always been guided by what customers want. It's the most customer-centric company that exists. And when we launched the FMCG business, we were the only company in India to be selling FMCG at a pan-India level. This was in 2015. The only other competition that we had was Big Basket, which was more of a regional player, and from 2015 till about 2020 we had a dream run where Amazon went ahead and was almost the only player who was doing it at that scale. However, post-21, some of the quick commerce entrants... Zepto and Blinkit... came in, and then later on Instamart also joined the race and they started offering customers a different value proposition, a different convenience option in terms of the 10-minute delivery. At that point in time, the way Amazon looked at the entire 10-minute delivery is, again, backwards from the customer lens. Is there a genuine need for people to get products at 10 minutes? And can that be done in a sustainable way is the question that Amazon raised. And the answer to that was maybe customers need products faster. That is a universal truth. But how much faster is something that was debated upon. And the way Amazon moved is towards a 2-hour delivery window with its Amazon Fresh offerings in most of the larger cities and the belief was that the entire industry will eventually move out of 10 minutes and move to more like a 1-hour to 2-hour delivery window and that is where Amazon was moving towards. However, this particular stance was challenged by customers and customers picked up quick commerce in a very large way, specifically post the post-COVID era. Post 2022-23, a large chunk of customers who had never purchased grocery went ahead and started their FMCG shopping online with one of these quick commerce entrants. And that led to a hockey stick growth for some of the quick commerce entrants. And what that also meant is that Amazon had to go back and figure out what do customers actually want. And in 2023-24, the decision was taken that there is a way to go ahead and run this business in a sustainable way. We need to figure out how do we do this business in a sustainable way and if that means going back to the drawing boards, restarting this entire business from scratch, let's go ahead and do it. And that is where Amazon entered into the space. Amazon entered into the space cautiously by going ahead and opening the first dark stores in Whitefield in Jan 2025 and then slowly from then onwards, with each incremental step, it was proven that this is a model that is working out and the model changed over time and we will talk about that in a while. But what essentially we kept true to is that the customers were evolving towards requiring a

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10-minute delivery. There was a sustainable way of going ahead and reaching to this 10-minute delivery and the Amazon stance then became that we are now offering a pyramid service to customers. At the base of the pyramid, we have our entire selection, which is close to 10 lakh SKUs, which are being offered on a national shipping model. And the investment that we're doing there, the investment that Amazon is doing there is in terms of reaching closer to customers by ensuring that we are covering as many cities as possible through a same 1-day or a same-day delivery network. On top of that pyramid sits the Amazon Now model, which will operate out of 300 cities as per the publicly available reports. And these 300 cities, customers will be able to order a section of the selection and get 10 minutes. And then there will be a further selection, which will be outside of the FMCG space, which will be available to customers in about a 30-minute to a 1-hour time frame. So from a pyramid structure standpoint, there is something that is available in 10 minutes depending on the need of the customer. There is something that is available within 1 hour and then there is something that is available in the next day delivery window and this pyramid goes ahead and caters to the entire customer need that exists in the market.

AK: Got it. In terms of the timing of this $3 billion investment, do you think it's more organic that Amazon has now reached a point where they sort of perfected their model? Or do you think it's more competition driven that, you know, competitive intensity in the broader online commerce space has become so intense that for a player to be relevant, they necessarily have to participate in quick commerce in a more meaningful way?

AN: I'll answer that in 2 ways. One is... The investment is backwards of figuring out what it takes to win in this particular market. And Amazon has entered the quick commerce space to go ahead and win the market. Now, in order to win the market, which is what I was referring to earlier, there were a few iterations to the model that Amazon now is operating in. When Amazon now first started off, the idea was to go ahead and operate out of about 15 to 20 cities which will cater to about 70% of quick commerce demand. From there, once that model was established and we figured out that is a model that can work, we figured out how do we expand the footprint beyond these 20 cities. When that model was challenged, we figured out that there is a way to go ahead and expand beyond 20 cities to about 100 cities and then to about 300 cities. And when we go ahead and operate out of those 300 cities, it is essentially meaning that about 80% of Amazon customers across the country will now be available to order 10 minute delivery services. And this, to reach this level, is the kind of investment that is required, so the investment is backwards of our commitment to be able to offer 10 minute delivery to the maximum amount of our customers. Now, obviously, there is competition and there are players who are already in this market. Our promise is going to be towards customers, and we are not going to be competition focused as much. It will always be customer focused. If there is a customer demand in a particular city, we will go into that particular city. That is how Amazon is looking at this whole investment and expansion plans.

AK: Okay. To expand the presence in quick commerce, what is the rationale behind doing it more organically versus acquiring an existing player? Because I think a couple of years back there were news reports that Amazon could consider potentially acquiring Instamart. So organic versus inorganic, how does Amazon think about it?

AN: So before Amazon decided to launch Amazon Now, there were talks in terms of entering this market through acquisition. However, that was ruled out early on because Amazon has always believed in building things from grounds up. That allows a lot of control over our own, over Amazon's own destiny, and that is where the decision was taken in terms of not acquiring a customer and building it from ground up. It has proved right. The decision has been proved right because the strategy has changed 3 times across the last 2 years from starting to operate out of 20 cities and then deciding to operate out of 100 cities and then deciding to operate out of 300 cities would not have been possible if we had acquired a particular company and would have wanted to let that company run on its own and just an additional line of business to Amazon. So that is the reason why Amazon did not go in for an acquisition. And typically in India, Amazon has never gone down the acquisition route; it has always stuck to building things grounds up because that is what helps keep the Amazon DNA alive in each of the businesses that it enters into.

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AK: Yes. Now let's speak about the key priorities for Amazon in terms of how they're going to allocate their investment. So the $3 billion, it would seem like from your comments that most of it could be directed towards expansion. So can you just give us some idea about how Amazon is thinking about this investment?

AN: Again, these will be things that are in the public domain and things that are my own assumption around the investment because I'm not privy to exactly where the investment is going into. However, there are 3 or 4 buckets that the investment will most likely go into. The first one is, as you rightly said, in terms of organic expansion. When we operate out of 300 cities with close to about 1,800 dark stores, that is the biggest area where a lot of investment will go into. The other area that a lot of investment will go into is in terms of enabling farmers, enabling farm produce organizations to go ahead and sell on Amazon Now. There's a lot of work that is happening around that in terms of technologically enabling farmers so that they can supply for the Amazon Now demand. The third area that it will go into is in terms of customer acquisitions and marketing. And the fourth area that it will go into is in terms of promotions and pricing, etc. Those are some of the areas that it will go into, with the largest being the first 2.

AK: That's it. Let's discuss each of these in a bit of detail. First, in terms of expansion into 300 cities, that is... I mean, the 300 city count is significantly higher than what some of the other players are doing. I think Blinkit is closer to 180. They're all closer to less than 200 at this point. What is the rationale behind 300? Because as you previously said, most of the quick commerce demand is still coming from metro tier 1 cities.

AN: Right.

AK: Can you explain the strategy, please?

AN: Yeah. So, like I said earlier, the way 300 cities has been looked upon is 80% of Amazon demand comes from these 300 cities, which means that 80% of Amazon customers live in these 300 cities and it will be unfair on a customer living in the 200th city or from the 200th to the 300th city if they're not able to get the 10-minute delivery. That is where the strategy has come in from that Amazon goes ahead and allows 80% of its customers to go ahead and cater to experience the 10-minute delivery. Now, in order to go ahead and execute this, it obviously requires micro- fulfillment centers, etc., at these cities and that is where a large amount of expansion is going into.

AK: Perfect. Can you help us understand how the dark store strategy or the micro-fulfillment strategy, how that might be different for metro or a tier 1 city versus tier 3, tier 4 cities?

AN: As of now, the way it operates and when I was at Amazon, the way it operated was that each of the larger metro cities has a hub, a 'Now' hub, where goods come in and then they are distributed across the dark stores in that particular metro city. For the micro-fulfillment centers, the existing Amazon Fresh network is being utilized in certain ways. So that the existing Amazon Fresh network that used to be there with about anywhere between a 4-hour to a 48- hour delivery window for these cities, that network is being utilized as the 'Now' hub in those particular cities. And then at the city level, probably 1 or 2 micro-fulfillment centers go ahead and allow the entire city to be covered. That is how the entire structure is being planned out. The tier 1 metro cities obviously required the 'Now' hub to come up while the remaining 100 cities or the remaining 300 cities are using the existing fresh hubs and then using micro- fulfillment centers at the city level to go ahead and meet those delivery in minutes guardrails.

AK: Mm hmm.

AN: And each of these cities would probably have 1 or 2 micro-fulfillment centers depending on the kind of demand that is coming in from those cities. The other aspect that goes ahead and adds up here is, a part of the Amazon Fresh network was powered by More Retail Limited, that is also being utilized in terms of expanding to these 300 cities. So some part of the network is also utilizing More stores as a hybrid dark store, or More stores as a full-fledged dark store

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in those particular cities, wherever More had a footprint already.

AK: A couple of follow-ups here. So first in terms of expansion priorities, how much headroom or how much opportunity still remains to expand within the key metro and tier 1 markets versus how much of it is going to be concentrated into tier 3, tier 4 markets?

AN: So as of now, based on the public reports recently released, Amazon now is operating out of 120 cities. In the top 6 or 7 cities, Amazon has gone ahead and covered the entire city. So there is almost the entire pin code in some of these larger cities that are covered by Amazon now. Now expansion in those cities will depend when a particular dark store starts reaching its limit in terms of the orders per day that it can process. However, as of now, the next phase of growth is going to come in from the 121st city to the 300th city. That is where most of the expansion will come in. In terms of adding dark stores in some of the tier 1, tier 2 cities, that will only happen when these dark stores start reaching their limits.

AK: Perfect. And in terms of the actual dark stores, either the locations that they prefer for the dark stores or the layout of the dark store, can you give us a sense of how that compares versus other quick commerce players in terms of either the size, the allocation to cold storage versus ambient storage, such kind of commentary?

AN: Again, these were not things that were done by looking at competition. Obviously, there are some benchmarks in terms of the industry benchmarks, but most of these decisions were taken backwards of what is the customer demand existing. The advantage that we had was we had been running Amazon Fresh for a very long time. We'd been running Amazon Fresh for almost 5 to 6 years by then. And we knew the kind of demand that existed for frozen fruits and vegetables, cold chain, etc., and that is what kind of fed into some of the decisions in terms of what the sizing, etc., is going to be. And our identification of location for dark store was also backwards of the kind of pin codes where most of our orders were coming from, so we started off from there and then moved into covering the entire city. There were some benchmarks that we did in terms of the industry, but a large part of knowledge already existed within the Amazon ecosystem because of running Fresh for so long.

AK: Okay. In terms of the capex that might be required for dark stores and micro-fulfillment centers, so I speak to other dark store franchisees and industry experts and, you know, the range that they indicate is anywhere between 1 to 1.2 to 1.5 crore per dark store. Do you think this is a similar sort of capex number for Amazon? How might the dark store capex requirement be different from a micro-fulfillment? And same thing.

AN: I am not aware of this because I did not manage that particular part of the business, but it will be benchmarked to the industry standards itself. It should be similar to industry standards.

AK: Okay. In terms of expansion, because I speak to dark store franchises, I know that some of them operate Amazon Now dark stores through a franchise model. If for further expansion into these 300 cities, to what extent are they going to be company owned versus franchise, do you think?

AN: Again, this is not something that I'm privy to. However, the first phase of dark stores were run by franchisee. But after March, I am not aware of who's running the franchisee and specifically in some of these tier 2, tier 3 cities. But like I mentioned, in some of the expanded cities, because More is running it as a hybrid store... the dark store is being run from a More facility. But I'm not sure as to who is actually running the dark store.

AK: Got it. Do you think even for the micro-fulfillment centers, Amazon might consider franchises or do they prefer that the micro-fulfillment centers be company owned?

AN: No, I think the franchisee model is working great. Again, this is my own assumption. Could be that they'll continue

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with the franchise model instead of owning the dark stores there.

AK: Got it. Could you also then next talk about, you mentioned farmer recruitment enabling them to be able to sell directly on Amazon. So first from a category perspective, can you help us understand the fresh versus non-fresh, how Amazon is thinking about this category mix?

AN: So fresh is an extremely critical category of needs because customers typically start their baskets with the most urgent need and that is usually milk, curd, fruits, vegetables, etc. So that is where having this particular selection becomes extremely critical for running the quick commerce business. And what we've learned is when we used to run the fresh business and what we've seen over years is having the farmer organization or the FPOs, etc. in sync with the kind of demand that is coming in from the market helps us have a better control in terms of the quality that we are offering to customers. And a customer most likely will switch a platform based on the quality of these particular products. So most of branded FMCG, etc. are very standardized in their offerings. However, fruits, vegetables, etc. are the areas where differentiation starts coming in and people would want their fruits and vegetables to be of the same quality as when they would go to the market and pick it up. To ensure that that is happening, Amazon has gone ahead and operated with a number of FPOs across the country where we go ahead and enable farmers in terms of the forecast in terms of the kind of demand that is coming in and then offer them cold chain solutions etc so that the fruits, vegetables, etc. move fast into our network and customers can get it as quickly as possible. And that is where we are operating with that large scale of FPOs and farmers, etc., in terms of enabling the fresh produce in the Amazon Now model itself.

AK: Is Amazon able to leverage Amazon Fresh suppliers for this or are they having to again expand in this area?

AN: Yes. No. So the customer demand is much higher. Fresh was operating out of a much smaller base and a smaller business, but Amazon Now's business is going to be much larger. So there is an expansion in terms of the quantity that we were procuring. However, we are leveraging the existing network, existing relationships that existed and we are also building some newer relationships in order to go ahead and meet the demands that will come in from Amazon Now, yes.

AK: Okay, so the investment is primarily focused towards enabling the suppliers, the sellers with tech solutions AN: tech AK: rather than actually.

AN: Yes.

AK: Got it.

AN: So that they are able to get the best value for their produce as well.

AK: Perfect. From a category perspective, I mean, the point that you made about the importance of the quality of the fresh produce, that makes sense. But if you think about the category... if you look at Blinkit, Instamart, even Flipkart, they are steadily moving away from grocery as a category in quick commerce and non-grocery side is also expanding. So can you talk to us about how Amazon is thinking about the category mix for Amazon Now, how this might change in the next few years as well?

AN: Right. So grocery or FMCG will continue to remain one of the strongest use cases for quick commerce because that brings in repeat purchase. The other categories which are fashion, electronics, hard lines, etc. don't bring in that kind of repeat purchase. You don't require those products on a repeated basis. So from a repeat perspective, FMCG is going to remain extremely critical. In terms of the way Amazon now is looking at it, again from publicly available

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information. A large part of the 10-minute delivery network will have some products which have a 10-minute delivery requirement, which will include electronics, which will include some amount of soft lines, some amount of non-FMCG products like stationary, etc., but that is where the 10-minute delivery window will exist. In some of the larger cities, there will be a network which will also allow customers to go ahead and get products in a few hours. And this will have a much larger selection, including electronics, accessories, soft lines, etc., which will be a much larger selection but available in a few hours. And then the rest of the portfolio will be available through the national shipping model, which will be either same day or next day kind of delivery. So that is how Amazon is looking at it. The advantage that Amazon had is Amazon had a national shipping model and then entered into quick commerce while most of the other entrants were into quick commerce and then now slowly moving into a model where they are also offering a few hours delivery, but trying to replicate the kind of selection that exists on a national shipping model. So both of them are approaching the same thing from two different ends of the stick.

AK: Got it. So my question, however, is if the actual quick commerce aspect of it, whether it be in half an hour, 1 hour, if it's primarily going to be focused on grocery side, some FMCG and the soft categories that you mentioned, how much does this actually help in building AOV? Because if you look at the likes of Blinkit, even Big Basket, their AOVs are significant enough to support per order cost, so for Amazon is that going to be a concern that your fees are going to be smaller?

AN: No, because we will continue to operate, because Amazon will continue to operate the 3 models, and the way sustainability is being looked at is which particular product requires what particular timelines for delivery, and basis that, that particular product sits in that particular dark store. And that is how we will go ahead and ensure that our profitability measures... the Amazon's profitability measure... kind of controlled. But in terms of AOVs, etc., it will be similar to whatever the industry benchmarks are, and there was a glide path that Amazon was kind of working towards in terms of meeting the profitability guardrails.

AK: Got it. Then there's this, you mentioned that products are going to be classified according to use. Typically how consumers require it. Has this... Because if you look at the consumer, if they go on to a Blinkit or a Zepto or a Flipkart Minutes, they can easily get some electronic product or even apparel in 1 hour or something like that. Is that going to be any concern to Amazon? Could it impact market shares for them or being on top of consumers' minds for them if you know this sort of differentiation is happening on Amazon but not necessarily other players.

AN: No, even other players, there is a differentiated delivery timeline that is existing for different kinds of products. All products do not come in within minutes. So the similar thing exists here. And again, the philosophy is going to be customer backwards. So if customers require those products and if there is enough salience for those products to be delivered to customer in minutes, we will figure out a way to deliver it in minutes. But as of now, Amazon understands that the customer is looking at it as a pyramid and hence offering it as a pyramid solution to customers. The Amazon app is going to remain one app. So customers, when they search, they'll see different timelines in terms of deliveries and then they make choices accordingly and go ahead and order it on the Amazon app itself. And when we talk about market share, again, my own assumption, market share should be looked at at an overall level and not differentiating it into a quick commerce versus e-commerce kind of a thing because the Amazon customer is not going to look at it that way or the digital commerce customer is not looking at it that way. So when you look at an overall market share level, I think that should be AK: Good enough. Okay. Got it. Then in terms of the seller network for the non-fresh categories, grocery, FMCG, other categories, again, is there some sort of overlap between their existing national seller network or are they having to develop a separate seller base?

AN: No, it's the existing seller network. The existing seller network that was already selling these on Fresh and the national network, the same seller network is being enabled on Amazon Now itself. There is an expansion of selection in terms of relevant selection being added for Amazon Now, because you need to sell lower ASP, etc. But the seller

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network at the back end remains similar.

AK: Perfect. I also wanted to talk about inventory management. So has there been some unlearning that Amazon has had to do around either forecasting or their replenishment model? Could you talk about how cost of managing or maintaining inventory in Amazon Now might be different from the e-commerce category, e-commerce space?

AN: So typically the days of cover for inventory that Amazon would hold in the e-commerce model was larger. At the hub or the dark store, there isn't space to carry that much amount of inventory. So on the Amazon national model, Amazon would typically carry about 15 to 20 days of inventory, whereas on the now model, you cannot carry that large amount of inventory. So there were changes in terms of how the suppliers are supplying into Amazon hubs, etc. There was some movement away from weekly replenishments to daily replenishments, etc that happened with Amazon Now. Also, when you're carrying lesser days of cover in terms of inventory, the chances of going out of stock is extremely high if you do not forecast it correctly. So forecasting required to be more robust. Now, those are some of the differences that came in. And the other aspect that came in is in terms of the number of SKUs being managed. The number of SKUs being managed in the now is much lesser than what it was being managed at a national shipping model. So that is the other area where things are different and hence has implications on the suppliers, MOQs, etc. So those are some of the things that were managed. But otherwise, the Amazon Now network is taking in a lot of learning from the national shipping model, but also remaining true to the new channel that it is operating in and hence has its own cost structures, has its own ways of working that are very different from the national shipping model. Good.

AK: Okay. Can you give us a sense of how the cost structure might be different, you know, for a similar product, similar category, cost of holding or managing inventory, how might it be different for e-commerce versus quick commerce?

AN: I am not very close to the supply chain bits. I don't know the exact cost. But obviously, Amazon Now is a cheaper model to operate than the national shipping model. So the costs are lesser on Amazon Now because one is obviously holding inventory. The other is also the inventory moves shorter distances as compared to the national shipping model, so it is cheaper than the national shipping model, but I don't know the exact costs.

AK: Okay. Let's now move on to talk about the investments on the customer acquisition and marketing side of things. How is Amazon differentiating its customer proposition?

AN: Right. So I think the biggest differentiator and that is what the advertising campaign is also all about is Amazon does not charge any fees on top of the basket value. So no delivery fees above a certain threshold, no handling fees, no surge fees, no rain fees, etc., that most of the other platforms charge. Now, this is remaining true to the proposition that Amazon has had for the last 12-13 years, which is will not charge anything outside of whatever is the basket value. So that is the biggest differentiator, and the Amazon ad campaigns and the marketing campaigns also go ahead and carry the same messaging, which is about getting things at free delivery, free, no surcharge, etc., no hidden charges, etc.

AK: That's it. How now in terms of, you know, just aspects, since you brought up Amazon e-commerce platform has started implementing a platform fee, do you think this is some sort of a sustainable differentiator for Amazon that they're not charging any fee or basket fee, etc., or is this just a temporary sort of a promo being offered to customers so they get more aware and habituated to Amazon?

AN: No, I think it's going to remain the same, at least for the next few years for Amazon now. Customers will get, and that's the proposition that Amazon now kind of stands upon, that customers will not pay for any hidden surcharges, hidden charges, etc. So above a certain threshold, there will be no delivery fees and there'll be no other fees that are being charged onto the customer. In terms of platform fees, etc., that is a tech development fee that was passed on,

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and that was a decision that was taken. That I think will remain across the board. However, outside of that, there'll be no other fees that are being charged. So customers will not see that at certain times in the day if there is a surge fee or when it's raining, there is a rain fee, etc. Those things customers will never see on Amazon. So some of the dark patterns that exist, those Amazon now will not carry.

AK: Perfect. Could you also talk about overall pricing strategy or discounting strategy for the products? How is Amazon looking to position itself there versus competitors?

AN: Amazon has a very straightforward tenet in terms of pricing, which is Amazon will offer the best value to customers, and when customers compare it to any of the other competition in terms, they would see the best value for their money on the Amazon platform. In order to meet that, Amazon is going to have whatever the pricing strategy, etc. Amazon will never disturb the market in terms of discounting much more than what is allowed by some of the vendor partners or running prices on its own, etc., which are far lower than what the industry standards are. Amazon is going to stay true to the value that customers are seeking. So if a customer is looking at a product on Amazon and is looking at a product on a competition platform, most likely they'll see a similar pricing structure, and we'll see that their basket value is actually lower than what the competition is offering at a basket level.

AK: Got it. How about on the service side of things in terms of time to deliver or other aspects? Is this going to be a differentiator for Amazon?

AN: That will depend on where the customer is located, how far from the dark store, etc. And that is being benchmarked to... Most of the industry standards itself, so customers in some of the larger cities will see a sub 10- minute delivery timeline and in some of the tier 2, tier 3 cities will see a sub 30-minute delivery timeline.

AK: Got it. If you just look at, you know, from a consumer perspective, and I know this will be different across the maturity of where the quick commerce market is more mature versus some of the newer markets, what are the priorities of consumers when they're buying from quick commerce platforms? How are they choosing? Is it the price? Is it the overall basket value? Is it the time to deliver or the assortment?

AN: I think it's a mix of all of them. I think customer chooses, bases the selection available, bases the prices available, bases the kind of the time to delivery, etc. in terms of the customer experience that they're getting and in terms of trust on the platform that what I order is what I will get and I won't have to go through loops of trying to correct what has been wrongly delivered to me... so those are some of the 4 things that customer looks at and most of Amazon's effort is in terms of getting the selection right, getting the inventory right, getting the pricing right and pricing at a basket level right and then customer trust etc something that Amazon has already built over the many years that it has been operating out of India.

AK: In terms of assortment, how are they looking either in terms of the total SKUs that they have? How do they compare versus competitors currently?

AN: Competitors are benchmarked on the kind of SKUs that Amazon now is carrying. However, that's not the only benchmark that Amazon is looking at. There are search results, etc. If there are customers who are searching for certain products, there is offline benchmarking that is happening where we are looking at what customers are buying in that offline market, because once you enter into a quick commerce space there is a lot of local nuance that comes in, and some of those local or regional products become critical for having on the quick commerce platform. So, those are multiple sources. So, there are independent research agencies who are feeding into the kind of assortment benchmarking that is happening. Benchmarking is online and offline both, and there is customer signals that is being read into, and that is what is creating the assortment. And there is obviously an upper limit in terms of the assortment that Amazon can carry in the dark stores. So, assortment is also being culled out basis some metric in terms of

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whether the assortment is moving, not moving, should we reduce the depth of the assortment, etc. So, some of both sides—assortment addition as well as assortment deletion—is happening at the dark stores and using those frameworks.

AK: Perfect. So, with what I'm understanding, there is some rationalization of assortment going on, but does that put them at a risk of having fewer selections or fewer overall options to serve it?

AN: No, this is not a rationalization. So the rationalization that is happening is on selection that is not moving, which means that there is no customer demand for that selection. When customers are not wanting that selection, there is no point in carrying that selection. That is the rationalization that is happening. But again, if some of those 4 signals go ahead and state that that particular selection is required, then obviously that selection will be brought back, even though it has been rationalized earlier. So when we talk about rationalization, it essentially means that if there are 6 different brands of dal available on a particular day and customers are only buying 3 of those brands, then the remaining 3, there will be some rationalization on the remaining 3 because there isn't as much customer demand on those on the same dal being available by 6 different brands.

AK: Perfect. Now from a consumer perspective also, which consumer cohorts are they trying to target? Because if you look at the Amazon e-commerce service, the way that it has evolved over the past years is targeting that premium customer. Is that true for Amazon Now as well?

AN: So Amazon Now is essentially targeting anyone who's an Amazon customer or anyone who's a digital commerce customer. If they're buying products on digital commerce, they are an Amazon Now customer. And in terms of premium or value seeking, etc., because a large chunk of the business is FMCG and the prices are more or less very similar across platforms, there isn't a large amount of differentiation in terms of the customer profile. However, if the customer is a digital commerce customer, that is an Amazon Now customer, and Amazon is trying to go ahead and get that customer into the ecosystem.

AK: Okay, but if you look at it in terms of lifetime value, which consumer cohort is now most valuable? Is it the existing Amazon customer or a Prime customer or is it potentially?

AN: So, the Prime customer continues to be the most valuable customer for Amazon. And I think there are enough external reports which go ahead and put a number towards how valuable a Prime customer is. But that remains, because the Prime customer essentially is signing up and stating that, "I love Amazon, so I'm going to pay to be a loyal member for buying on Amazon." So, obviously, they are the most valuable customers for the Amazon ecosystem. But outside of that, the intent is to make as many customers Prime as possible and across the entire customer journey. So, the state... it means that remains true for Prime is that make Prime... so make the Prime membership so good that it's stupid to not buy it. So that is where that statement kind of remains true. And the intent is to make as many customers as Prime as possible and Prime remains the most valuable cohort for Amazon and for Amazon Now as well.

AK: How are they integrating Prime with Amazon Now? In terms of...

AN: In terms of not AK: In terms of any membership benefits or anything, is there any integration that's happening?

AN: That I am aware of as of now.

AK: Got it. So then the idea for Amazon Now is then to convert more existing customers to use Amazon, for them to start using Amazon Now rather than, you know, meaningfully taking away or trying to get customers from other platforms.

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AN: Yes, absolutely. Because that itself is a large customer base. However, the service remains relevant to anyone who's using digital commerce.

AK: Can you talk about discounting or the promotional intensity that Amazon Now is currently doing? How this compares to some of the other platforms?

AN: So, because the pricing is run through some of these sellers and sellers go ahead and pass on the kind of pricing that most of the vendors are passing on, the price intensity remains agnostic of the platform. So Amazon is not controlling any of the pricing as such. What that also means for Amazon Now is that Amazon Now as a strategy is looking at value at a basket level. Is the customer getting better value than what they would get at a different platform? And that is what remains true by ensuring that there are no fees, etc. At a product level pricing, I think that is privy to the sellers and the suppliers, and that is a discussion that remains outside of the Amazon Now purview.

AK: Okay, so any sort of discounting that might be offered currently is all primarily owned by the sellers rather than the platform.

AN: Sellers, correct.

AK: Rather than the platform, got it?

AN: Correct.

AK: From a broader industry perspective, given that some of the metro and tier 1 markets where customers are already habituated, more mature potentially, they're not looking at pricing as much now. Do you think Amazon will be able to take away market share, especially considering that they're entering the market so late?

AN: Right. So there is a large chunk of customers who are Amazon customers, but for their immediate needs had switched to some of the other platforms because Amazon did not have a service. That customer is coming back into the quick commerce offering that Amazon has. Also, as customers go ahead and try out Amazon Now, and that is the intent for Amazon Now customer acquisition as of now, as customers keep trying out Amazon Now, they get delighted by the service that's coming in in terms of the 4 things that remain important for the customer: the kind of assortment that they're seeing, the kind of delivery timelines, etc., that they see, the kind of trust that they see on Amazon in terms of returns, etc., in case things go wrong, etc., and the kind of value for money that they're seeing on the platform. When customers are seeing all of this, they are going ahead and making the switch onto Amazon Now, and that is where most of the conversion will continue to happen as Amazon kind of goes ahead in this journey, and a large part of the offering that Amazon Now is doing is in terms of giving customers that best value when they're buying irrespective of the kind of channel that they're buying in. So whether they're buying on national shipping or they're buying on Amazon Now, Amazon continues to offer the best value to the customer. That is what Amazon is remaining true to and Amazon Now also remains true to that statement.

AK: Got it. So realistically, if you think about market share as per industry reports or news reports, Amazon Now currently has a market share of about 6%. Realistically, how much do you think they can expand this market share over the next 3 years?

AN: I think the publicly available information says that the aspiration is to be the leader in this particular channel. So that is where Amazon is moving towards and Amazon Now, most of the expansion, most of the investment, etc., are going towards ensuring that Amazon reaches that level where Amazon is the market leader in this particular segment. And for that, whatever is the market share that Amazon would need to go ahead and get to.

AK: Okay. So if it may be considered a Blinkit or a Zepto, they're potentially closer to 23-24% market share. Is that

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something that you think is realistically achievable over the next 3 years? I mean, which is the time horizon for this investment? Or do you think that's something that could take longer than 3 years?

AN: It will depend on how customers pick up Amazon Now as Amazon moves into those 300 cities. A large chunk of that particular race is going to be won by that. But like I mentioned earlier, Amazon is not looking at market share in that channel alone. Amazon is looking at market share for the digital commerce wallet and that will mean that Amazon is looking at all 3 channels combined together. So that is where a large part of differentiation in the way industry is looking at it versus how Amazon is looking at it.

AK: Perfect. So in that, if that's the strategy, then do you think simultaneously Amazon is also going to be investing in its e-commerce infrastructure? I think they've already laid out some plans, but then the competition there is again from Flipkart, which does have larger market share than Amazon. So do you think this 2-pronged strategy of trying to become the market leader in the broader online commerce space through both e-commerce and e-commerce is that? That is that too much to handle over the next 3 years or 4 years?

AN: No, there are very different ways of kind of approaching that particular thing. And while there are different ways of approaching it, there are still a lot of synergies in the way the business is being run. So it is not, I don't believe that it is too much for Amazon to handle. Amazon has gone ahead and done similar things in the past and that is something that we'll have to wait and watch in terms of how Amazon kind of plays it out in the next 2 to 3 years, but at least there is enough amount of optimism that goes on to say that Amazon will be the market leader for any customer who's going ahead and paying through the digital commerce medium in these 300 cities.

AK: Okay, let's also talk about the profitability side of things. So this has come up during the course of this conversation a few times. But given that, you know, some of the other incumbents like Swiggy are only now reaching contribution margin positive, not even EBITDA positivity. What does the path to profitability for Amazon look like? Is it, you know, going to follow similar timelines as the industry incumbents? Could it be shorter than then perhaps?

AN: It will follow similar timelines. I think the glide path that existed back then went right up to 2028. It will follow similar timelines, and I don't think profitability is the guardrail that Amazon Now expansion is kind of moving on. It's not being guided by profitability. It is being guided by expansion and customer relevance right now. So profitability will come in at some point in time, but that's not the most important metric right now.

AK: That's helpful. But in terms of, you know, if you look at it at the first 2 level, there are, if you look at industry benchmarks, the understanding.

AN: Most of Amazon Now's numbers are very close to the industry benchmarks, except for orders per day per dark store, because that is lower for Amazon given the kind of market share that Amazon has. However, average order value etc. are very similar to industry benchmarks.

AK: Okay, yes, I was talking about the orders per store aspect, orders per store per day. So, the industry understanding is that about 1,700 to 1,800 orders per day is what helps a store achieve break even. Can you help us understand? I mean, you did mention that it is lower, but is it primarily lower in the newer expansionary markets? Or do you think even the dark stores in existing mature metro and tier 1 markets are also lower than that benchmark?

AN: So some of the dark stores in the matured cities would be higher, would be at that benchmark already. But a large chunk of the dark stores would be lower than that number because I am just looking at it backwards from the kind of share that Amazon has. If at close to about 6% share with about 120 cities, the orders per day per dark store should be lower because otherwise, it will have much bigger market share. But there were stores that had already reached to that level in some of the mature markets. Newer cities, tier 2, tier 3, obviously the numbers would be much

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smaller.

AK: Got it. So then in terms of the dark store density, typically what the other players, I guess, have done is that they are trying to balance density with average order per store per day. How is Amazon thinking about it then?

AN: So some of the larger cities, the density is similar to what some of the other players are and the way the density has been created or the way the mapping has been done is backwards of the kind of customer that reside in those pin codes because we had a lot of historical data in terms of which pin codes are buying what from Amazon. So backwards of that is where the mapping has been done and then as and when each of the dark stores kind of reach that level, newer dark stores are planned in those particular areas to increase the density there. But as of now, most of the larger cities have similar density to what some of the competition has. And as we are expanding into the other cities, there the number of dark stores are either 1 or 2 in each of those cities, depending on the size of the city that it's expanding into. Hello? Can you hear me?

AK: Hello? Hello.

AN: Hello, yeah, can you hear me?

AK: Yes, I can hear you. My apologies.

AN: Hello, can you hear me? I can hear you now.

AK: Yes, I was asking, so for Amazon and dark stores, considering that, you know, some of the categories are still going to be continued to, they're going to be handled by the e-commerce aspect, the national aspect that you mentioned. So does this 1,700 to 1,800 orders per dark store per day, does that benchmark still hold true or do you think that threshold could be lower for an Amazon dark store to achieve profitability?

AN: Again, I am not close to dark store operations, so I am not sure of that particular number... but yes, from a strategy standpoint, some part of the selection will be serviced through the national shipping model and even from a profitability standpoint, while there is some amount of reporting that will happen for the channel, etc., but even that will be measured at an overall level, and so some of these conversations within Amazon are very different in terms of how the industry looks at it.

AK: Got it. And now that brings me to the end of my question list. I know we have covered a lot of ground. Is there anything that you think that we have not touched upon as it pertains to Amazon Now?

AN: I think the only aspect that has not been touched upon is the way of operation. So Blinkit, for example, operates an inventory-led model, whereas Flipkart, etc., operate a marketplace-led model. And Amazon operates a hybrid model because some part of the selection is offered through More, which is operating an inventory-led model, and some part of the business is offered through seller, which is through the marketplace model. So that is the other nuance of Blinkit. When they report their numbers, they are actually reporting—when they report their profits, etc., they are reporting margins earned through sale, whereas some of the other platforms when they are reporting, they are reporting commissions. So that is the other nuance that comes in in terms of how each of the platforms is reporting their numbers.

AK: But that is helpful. Now this hybrid, can you give us a sense of whether it is category specific? Is it region specific?

AN: No, it is region specific. There are areas where More had a footprint. Wherever More had a footprint, it has been utilized to power Amazon Now. Where More did not have a footprint, there Amazon has gone ahead and opened its own dark stores or used franchisee to open their dark stores.

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AK: Which regions does More have a presence in?

AN: There are a large number of cities. So Northern India, Eastern India, Andhra Pradesh, etc., More had a lot of presence there. Western India is where More did not have a very significant presence.

AK: Perfect. And that brings us to the end of our call today. Thank you so much for your time today.

AN: Thank you, Akshatha. It's a pleasure talking to you.

AK: Have a good day ahead. Bye.

AN: Thanks. Bye.

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