Amazon Recalibrates Grocery Strategy in India, Prioritizing Quick Commerce Over Scheduled Deliveries
In a strategic pivot, Amazon is preparing to scale down its 4-24 hour grocery delivery service, Amazon Fresh, across several major Indian cities. This move is part of a broader focus on enhancing its quick commerce offering, AmazonNow, according to a recent report by UBS Global Research.
Transition Across Urban Markets
The transition is expected to unfold in 10-15 large urban markets where AmazonNow is being actively expanded. In these locations, AmazonNow will effectively replace Amazon Fresh, signaling a significant shift in the company's operational priorities. This realignment underscores Amazon's commitment to faster fulfillment models as competition intensifies in India's burgeoning quick commerce segment, currently dominated by players like Blinkit, Zepto, and Swiggy Instamart.
AmazonNow: The Primary Vehicle for Rapid Delivery
AmazonNow, currently operational in six cities including Bengaluru, Mumbai, and Delhi, is being positioned as Amazon's primary vehicle for rapid delivery. UBS estimates that the service could expand to 10 cities in the near term, capturing a substantial share of the quick commerce demand in the country.
The research note highlights key insights into AmazonNow's performance: "We understand AmazonNow's average order value (AOV) is Rs 260-300, while the mature stores (more than 6 months old) have a higher AOV of Rs 320-360, per our checks. The primary reason for low AOV vs Blinkit and Instamart is that AmazonNow is currently operating in FMCG and only recently adding other categories such as electronics, toys etc."
Expanding Dark Store Network
To support this quick commerce push, Amazon is rapidly expanding its dark store network. Currently, AmazonNow operates approximately 450 dark stores, with an addition rate of about two stores per day. This network is expected to scale up significantly over the next year, enhancing the company's capacity for instant deliveries.
Continued Investment in National Logistics
Even as Amazon pivots towards faster deliveries in urban centers, the company continues to invest in its national logistics backbone. Amazon currently operates over 20 large warehouses for its broader ecommerce operations and plans to increase this footprint further by mid-2026. This expansion aims to improve delivery timelines across India, ensuring a robust infrastructure for both quick commerce and traditional ecommerce.
Future of Amazon Fresh
Amazon Fresh, which remains operational in over 100 cities, will continue to serve markets where quick commerce has yet to be rolled out. However, in cities where AmazonNow is introduced, Fresh is likely to be phased down. This reflects a broader industry shift from scheduled grocery deliveries to instant fulfillment models, driven by changing consumer preferences and competitive pressures.
The UBS report is based on channel checks and expert conversations, providing third-party assessments of Amazon's strategy rather than company-confirmed plans. This analysis offers valuable insights into the evolving dynamics of India's retail and ecommerce landscape.
