The US tech giant, which has already deployed $40 billion in the country, will invest money in all of its businesses—its core e-commerce operations, cloud computing division Amazon Web Services, entertainment businesses including Prime Video and MX Player, and its devices segment.
“Other players will be pushed to accelerate investments of their own, spurring faster innovation, deeper regional penetration, and more nuanced strategies for tier-II and tier-III markets,” said Naveen Malpani, partner and retail and e-commerce industry leader, consulting firm Grant Thornton Bharat.
Deeper penetration
Amazon, which has millions of Prime subscribers in the country, has been stepping up its promise of quicker deliveries.
For instance, this festive season, Prime members drove demand from tier-II and tier-III cities across key categories, including appliances, fashion and beauty, smartphones, and furniture. Prime members experienced faster deliveries, with over 3 million products delivered in metro cities within the same day or the next day, and more than 5 million products reaching customers in tier-II and -III cities within two days.
Although a late entrant in the quick-commerce play, it is also expanding its presence through Amazon Now, its 10-minute delivery service that now operates in three cities with more than 300 micro-fulfilment centres. The company is adding two centres a day as it scales its shorter delivery-window model.
Udit Madan, senior vice-president, worldwide operations at Amazon, said speed remains a central focus for the business. “We’re going to get to faster speeds—not just our fastest speeds with Amazon Now, but by expanding into more and more areas. This is a significant area of investment for us and one that will shape the business and demand patterns in India. A large part of our investment this year went towards speeding up and improving reliability in tier II-III markets, something we are now doing in parts of the US and Europe.”
India’s online commerce ecosystem has expanded significantly over the last decade, dominated by companies such as Walmart-backed Flipkart, Amazon, Meesho, Nykaa, Swiggy, and Eternal Ltd.
While the overall retail market is expected to grow from $1 trillion in 2024 to $1.7 trillion by 2030, according to estimates from consulting firm Deloitte, online retail is projected to grow much faster—from $75 billion in 2024 to $260 billion by 2030—doubling its share of total retail to 14%.
Quicker response
Young shoppers are increasingly comfortable buying everything from cosmetics to apparel on their smartphones. This is especially true post-covid with the entry of new quick-commerce players such as Swiggy Instamart, Blinkit, Zepto, etc.
Food aggregator and quick-commerce platform Swiggy plans to raise about $1.3 billion (roughly ₹10,000 crore) to expand its Instamart (quick commerce) network of dark stores and warehouses, and invest in cloud and technology infrastructure, Mint reported on 10 December.
In October, rival Zepto raised $450 million at a valuation of $7 billion, following a $665-million pre-initial public offering round in 2024. The Tata group-backed BigBasket has also raised fresh capital, and Blinkit continues to lead the quick-commerce category.
In June, Amazon announced investments of ₹2,000 crore in 2025 to expand and upgrade its operational infrastructure, including the construction of new fulfilment and sortation centres and enhancements to existing facilities, aimed at improving speed, safety, and efficiency.
In an interview with Mint, Madan said Amazon Now “is very much a focus for us today”. “We’re investing a lot, and it is a part of a much longer strategy to offer the Earth’s large selection at really competitive pricing and fast speeds. It’s going to be a very long segment for us, but so is going to be at the rest of the business, which is going to be millions of products across millions of sellers that customers get the next day, same day or in a few hours.”
Satish Meena, founder, market intelligence firm Datum Intelligence, said the investment is “massive money” entering the broader digital commerce market after a period of slow investment.
A significant number of Amazon’s premium Prime customers who typically spend more and buy across categories have migrated to quick-commerce platforms for small-ticket items, he said.
“Quick commerce has captured many routine purchases that Amazon used to dominate. To win back these customers, Amazon has to invest aggressively in Amazon Now. For two years, Amazon tested the waters in quick commerce, but not at the scale it usually prefers. Now, with plans to open around 300 dark stores, it is clear they have committed fully to the category,” he said.
Amazon is not alone in doubling down on India.
On 29 May, Moneycontrol reported that Walmart-backed Flipkart Internet, the marketplace arm of the e-commerce company, received a ₹2,225 crore capital infusion—its fourth internal funding round in 14 months.
All for an expanding market
Analysts expect India’s e-commerce market to expand significantly over the next decade, helped by a growing customer base, a larger seller ecosystem, and deeper penetration in smaller cities.
“Over the next five to ten years, India’s e-commerce story is going to expand in a much larger way than it has today. The market is expected to have many more consumers compared to today, potentially doubling the total customer base. The seller base will also be much larger,” said Mrigank Gutgutia, partner, consulting firm Redseer Strategy Consultants.
Gutgutia said the market will likely split between convenience-led platforms, including quick commerce, and value-led platforms targeting non-metro consumers. “Over the next five to six years, significant investment will be required across physical infrastructure for customers, sellers, and logistics,” he said. Gutgutia said an estimated 200 million additional customers are expected to come online over the next decade.
Malpani said Amazon’s expansion of its logistics and fulfilment network will raise industry benchmarks in terms of delivery speed, supply-chain sophistication, and consumer experience.
“This is not just an infusion of capital into e-commerce, it is a long-horizon bet on India’s position as a global digital and supply-chain hub. It signals a long-term bet on the country’s role as a future hub for digital infrastructure, supply chains, and exports; not just a large consumption market. It’s clear that India will sit at the centre of global strategic priorities across retail, cloud, AI and logistics,” he added.
Meena said other players could possibly step up investment in infrastructure next year.
“Ultimately, there will be a lot of consolidation, and you would end up with maybe a two- to three-player market. It’s early for that because none of these players are in a position to leave the way for someone else,” he added.
