India’s e-commerce market is booming, with demand more than doubling for some players. But the fast-delivery push from Flipkart and Amazon raises the stakes in an already crowded space where profitability remains under pressure.
Flipkart, one of India’s largest e-commerce players, entered e-commerce later than local competitors such as Blinkit, Swiggy and Zepto. But it has now surpassed more than 800 dark stores (distribution centers for online purchases) this week, TechCrunch has learned, and is looking to double that by the end of 2026, according to UBS.
The expansion comes as India’s fast-paced commerce sector enters a more competitive phase. The strain is reflected in recent developments, including departure of a co-founder at Swiggy this week as companies reassess strategy amid rising competition and costs.
The Walmart-owned company debuted in fast-paced commerce with Flipkart Minutes in August 2024, offering deliveries across categories in just 10 minutes. Since then, the industry has expanded rapidly. More than 6,000 dark shops now operate, leading to significant overlap among players in major cities and intensifying competition, Bernstein said in a report earlier this week.
Beyond big cities
Flipkart’s network in India remains smaller than that of market leader Blinkit, which has more than 2,200 dark stores, according to Bernstein. However, Flipkart is betting on expanding beyond major cities to drive growth. This is unlike Blinkit, which plans to scale to 3,000 dark stores by 2027 while focusing on its top 10 cities.
“Flipkart has that Walmart DNA,” said Satish Meena, founder of Gurugram-based Datum Intelligence. “Walmart’s DNA has always been about expanding the total addressable opportunity for dominance by expanding the market.”
Flipkart is already seeing traction beyond big cities, with 25-30% of its e-commerce orders now coming from small towns, a source familiar with the matter told TechCrunch. Orders per dark store are also up about 25% month-over-month, the person said.
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However, the growth of fast-paced commerce remains concentrated in the larger cities. The biggest demand, Bernstein said, continues to be fueled by big cities, where higher population density supports faster deliveries and better use of dark stores, even as expansion into smaller cities accelerates.
This momentum also underpins profitability. India’s top eight cities account for more than 3,800 dark shops operated by the five biggest players, with about 3,600 of those having the potential to be profitable, according to Bernstein.
“The metro markets are obviously better in terms of performance, better in profitability because of the higher yield,” said Karan Taurani, executive vice president at Elara Capital, a London-based investment bank and brokerage firm. “This business is all about higher yield, and right now, that’s largely coming from metro markets.”
However, some analysts see a longer-term opportunity beyond the big cities. “Non-metros (small cities) can get a boost if companies expand beyond groceries and offer a wider range of items at faster speeds,” said Datum’s Satish Meena. “Flipkart is betting on it.”
However, scaling beyond major cities will take time. Flash commerce is currently viable in about 125 cities, with dark shops typically taking six to 12 months to reach maturity and profitability, said Aditya Soman, senior research analyst at CLSA, a Hong Kong-based brokerage. Many of the newer stores in smaller towns are still in the development phase, he added.
Amazon, which entered India’s e-commerce market in late 2024, shortly after Flipkart’s debut, is also ramping up its presence. The e-commerce giant has opened around 450-500 dark stores so far, with around 330-370 currently operating, according to UBS, as it looks to tap into growing demand for faster deliveries.
Placing pressure on incumbents
Flipkart is not only relying on dark-store expansion to compete, but also on aggressive pricing. The company offers some of the highest discounts in the sector – about 23-24% across categories, based on a sample basket analyzed by Jefferies last month – as it tries to attract users in a market where price and convenience remain key drivers of demand.
Pressure from such strategies seems to be working. Brokerage firm JM Financial recently warned that Swiggy’s fast trading business is stuck in a ‘growth vs. profitability’ impasse and risks destroying shareholder value, adding that a takeover by a bigger and better-capitalized player may be the best outcome for investors.
Shares in Eternal, which owns Blinkit, are down about 15% so far this year, while Swiggy is down more than 29%, even though Zepto is preparing to go public to the Indian stock markets later this year.
The entry and expansion of major players like Flipkart and Amazon are reshaping the competitive landscape. “Fleece commerce is no longer a start-up — it has become a big-player game,” said Ankur Bisen, senior partner at retail consultancy Technopak Advisors.
He added that the economy and limited industry diversification could eventually lead to consolidation as companies compete for the same set of 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 a silent period following the IPO filing.
