Amazon Retail’s Growth in Quick Commerce
Amazon’s quick commerce and grocery retail division, Amazon Retail, which manages Amazon Now and Amazon Fresh, has recorded impressive revenue growth during FY26. Despite this, the company’s losses have escalated sharply, primarily due to expenses outpacing increases in revenue.
Revenue Surge for Amazon Retail
Amazon Retail’s operational revenue soared nearly 50% year-on-year, reaching Rs 3,065 crore in FY26, a significant increase from Rs 2,051 crore in FY25, as reported in the standalone financial statements sourced from the Registrar of Companies (RoC). The bulk of the company’s revenue stems from the sale of goods via Amazon Now and Amazon Fresh, which constitute its exclusive source of operational income. Additionally, the company recorded Rs 15 crore from other sources, elevating its total revenue to Rs 3,080 crore for FY26.
Rising Expenses and Impact on Margins
While the company successfully boosted its top line, the structure of its costs remains burdensome. The procurement of materials represented approximately 68% of Amazon Retail’s overall expenses, which surged nearly 65% to reach Rs 2,887 crore in FY26. This scenario limited the company to a gross margin of just around 5.08%. Beyond procurement, Amazon Retail incurred Rs 529 crore in delivery expenses and faced platform fees amounting to Rs 248 crore. Legal costs were also high, totaling Rs 442 crore during FY26.
Overall Expense Growth
Total expenses at Amazon Retail skyrocketed by 71.8% to Rs 4,239 crore in FY26, up from Rs 2,468 crore in the previous year. This expense growth significantly outpaced revenue growth, resulting in a net loss that expanded more than threefold to Rs 1,158 crore in FY26, compared to Rs 394 crore in FY25. On a per-unit economics basis, the company expended around Rs 1.38 to generate every rupee of revenue in the fiscal year.
Operating Performance and EBITDA
The company’s operational results remained under pressure, with an EBITDA of negative Rs 1,136 crore. Both the EBITDA margin and ROCE deteriorated to -37.06% and -235.22% respectively in FY26.
Investment in Quick Commerce Market
These substantial losses occur as Amazon escalates investments in India’s quick commerce market, which is experiencing fierce competition from Blinkit, Swiggy Instamart and Zepto. As reported by Reuters, Amazon has plans to invest $3 billion in India’s quick commerce sector by 2030, marking its largest commitment to date in this area. Of this total, approximately $1 billion is anticipated to be invested by the end of 2027, followed by another $2 billion by 2030.
Market Position and Strategy
Amazon has indicated that its quick commerce division has surpassed $1 billion in annualised gross sales over the last three months, which Amazon claims to be the fastest-growing e-commerce segment in its Indian operations. However, the report states that Blinkit, Swiggy and Zepto collectively dominate 77% of the quick commerce market, while Amazon holds a mere 6.2% share. Presently, the company operates roughly 750 quick commerce stores and aims to expand this number to approximately 1,300 by April next year.
Challenges Ahead
Amazon’s push into quick commerce underscores the capital-intensive nature of competing in a market defined by rivals such as Blinkit, Swiggy Instamart and Zepto. The main challenge for Amazon lies not just in building a more extensive fulfilment network, but in achieving adequate order density and enhancing margins across that network. The discrepancy between revenue growth and expense growth indicates that scale has yet to provide the operational leverage needed. Effectively converting Amazon’s existing customer base into regular quick commerce users will be pivotal for the economic viability of this model.