Amazon India is set to launch its rapid delivery service, Tez, earlier than planned to seize the booming market, spurred by competitors like Blinkit and Zepto. The move marks Amazon's debut in quick commerce globally, with Tez focusing on groceries. Amidst a competitive landscape, the sector attracts significant investments. Analysts project rapid growth, with Amazon making strategic shifts to optimize operations and maintain its strong position in India's e-commerce scene.
Amazon India is gearing up to introduce its rapid delivery service, codenamed Tez, by late December or early next year, eager to tap into the thriving sector that saw impressive gross sales of around $5.5-6 billion this month, led by companies like Blinkit, Zepto, and Swiggy Instamart, according to sources familiar with the matter as reported by ET.
Initially eyeing a launch in the first quarter of 2025, the US tech giant has shifted gears to expedite the process, spurred by the absence of a stake in India's swiftly expanding online commerce realm. The impending debut of Tez in India—currently a tentative title—will signify Amazon's inaugural venture into the quick commerce domain on a global scale.
Insiders reveal that discussions on this pivotal launch will feature prominently in the upcoming monthly review scheduled for the first week of December, preceding the much-anticipated annual Smbhav event.
Recruitment efforts are in full swing, with a dedicated team collaborating with internal and external partners to bring this high-priority project to fruition. Amazon's India grocery and essentials division characterizes this initiative as a 'greenfield, grounds-up endeavor' in a rapidly evolving e-commerce landscape within the country, as noted in a recent job listing.
While the official moniker for the quick commerce service remains pending, sources hint at Amazon's strategic alignment with the prevailing industry dynamics, poised to kick off operations with a focus on groceries and daily necessities.
Amazon's proactive strides in this domain come amidst a competitive backdrop where its primary rival, Flipkart, launched its quick service, Minutes, ahead of this year's festive season, subsequently expanding its footprint across major urban centers.
Further diversifying the landscape is Tata-owned BigBasket, which transitioned to a quick commerce model, witnessing substantial gross sales exceeding Rs 900 crore last month, sources familiar with the matter disclosed.
Tata Digital, operating Tata Neu, has also entered the quick commerce arena with its service, Neu Flash, as reported by ET in late October.
The acceleration in the quick commerce sector has incited a flurry of investments, with platforms intensifying their operational capacities. Notably, Zepto recently secured an additional $350 million, supplementing its existing cash reserves exceeding $1 billion, while Zomato, the parent company of Blinkit, received shareholder approval for a substantial $1 billion QIP infusion.
Analysts project a robust growth trajectory for the quick commerce market, anticipating its size to surpass that of food delivery by 2026 in terms of gross order value. The evolving landscape underscores the potential for significant expansion among players over the next 3-5 years, with quick commerce poised to reach nearly $7 billion in 2024.
In a strategic shift, Amazon India witnessed a leadership transition, with industry veteran Samir Kumar assuming the helm following Manish Tiwary's departure. The company is also relocating its Bengaluru headquarters closer to the city's airport in January, aligning with cost optimization strategies amid broader operational adjustments.
Despite competitive pressures, Amazon's India marketplace unit exhibited a notable 14% increase in operating revenue during FY24, accompanied by a 28% reduction in losses. While the growth trajectory slightly moderated compared to pre-pandemic figures, Amazon remains a formidable player in the dynamic Indian e-commerce landscape, navigating shifts in consumer preferences and market dynamics with agility and foresight.
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