Amazon India's big play is now ads, and q-comm the new billboard

Amazon India’s advertising and allied services revenue grew 25% in FY25, against a 21% growth in its mainstay marketplace business, making it one of the fastest-growing segments, data from business intelligence platform Tofler showed.

However, the marketplace remains Amazon India's backbone; it contributed ₹17,328 crore, or 58% of operating revenue, while advertisements and logistics brought in another ₹8,342 crore. The balance ₹4,468 crore came from other services.

The Tofler data showed Amazon Seller Services posted a 19% jump in revenue to ₹30,139 crore in FY25, up from ₹25,406 crore a year earlier, as more customers transacted on its platform. Losses shrank sharply, with the net loss narrowing 89% to ₹374.3 crore from ₹3,469.5 crore in FY24, driven by tighter cost control and improved operating efficiency. To this, Amazon Now is expected to add a fresh stream of advertising revenue.

Marketplace is the consumer-facing platform, while Amazon Seller Services is the corporate entity running and monetising that marketplace, earning money from seller commissions, fees and advertisements.

Amazon India appears to be in the middle of a pivot, where its anchor remains online retail, with advertising being the tailwind.

Amazon India can well maintain its lead in ad revenue even without quick commerce, said Siddharth Jhawar, country manager at AI-driven ad-tech company Moloco. Its comprehensive full-funnel strategy, which combines the e-commerce marketplace and Prime Video, is already robust enough to offer advertisers a strong return on investment (ROI), Jhawar said.

While most of Amazon India's advertisement revenue comes from its marketplace services, the share from streaming ads is set to grow, he said. “In the next one or two years, a good part of Amazon's ad revenue will come from streaming. But marketplace will continue to enjoy the most advertising attention."

The quick commerce business also has potential but is still in a nascent stage, he added. “Advertising requires scale. Right now, Amazon Now is tiny and that alone may not be attractive to advertisers. But once they expand into a couple of cities and grab at least a double-digit market share, it could convert into meaningful ad dollars," Jhawar said.

Amazon Now was launched early this year in Bengaluru, before expanding to Delhi and more recently to parts of Mumbai. The service promises 10-minute delivery of groceries, personal care and other daily essentials. Amazon has already set up about 100 micro-fulfilment centres across these cities and plans to add hundreds more by the end of the year. Order volumes in Bengaluru and Delhi are reportedly growing around 25% month-on-month since launch.

Rivals lead quick commerce

Amazon Now's rivals, however, have a far wider footprint: Blinkit operates in over 100 cities with roughly 2,000 dark stores, while Zepto covers about 40 cities with around 1,000 stores, and Swiggy Instamart runs in over 100 cities with 1,021 dark stores.

Digital media accounts for more than half of all advertising spending in India, and e-commerce companies together generated $3 billion worth of advertising revenue last year, according to Jhawar. Amazon India already accounts for a third of this number. With a total ad revenue of about $600 million last year, quick commerce is now adding up to be a valuable lever for platforms, with advertisers rushing to make the most of growing engagement from online shoppers.

Amazon India's rival Flipkart is not too far behind in reaping ad revenues. In FY25, it logged an advertisement revenue of ₹6,317 crore, up 27% year-on-year.

Mint reached out to Amazon India and Flipkart for comments on their advertisement revenues, but there was no response till press time.

While the competition is stiff in the online advertising space, the shift indicates dilution for tech giants Google and Meta, who have long dominated the scene. However, there seems to be space for all in the online advertising universe. “The way these numbers are looking for all platforms, it's not like one is snatching from the other. They're just growing the net pie of retail media. I think where they're snatching from is a bit of Google revenue, a bit of traditional streaming revenue, and not really from one another. The overall retail media is stealing from other categories," said Jhawar.

Amazon continues to hold a significant advantage, given its wider adoption in metro cities, particularly in the electronics and fashion categories, according to Ashutosh Sharma, vice-president and research director at Forrester Research. “Amazon certainly sees higher ROI by GMV (gross merchandise value), thanks to a highly fragmented market and the presence of very few large e-retailers. Advertisers, therefore, cannot let go of the temptation."

On their part, quick commerce marketplaces also stand to benefit from advertisers, with ad revenue potentially seen outpacing income from the core business over time.

Swiggy and Zomato's parent Eternal report advertisement revenue as a stream, but neither of them has detailed a clear figure for FY25 in their shareholder letters or annual reports. The number is nested within 'platform services' for Swiggy or overall 'revenue from operations' for Eternal.

Amazon did not just take cues on rolling out quick commerce from Flipkart, Swiggy and Zomato; like them, it also dipped into customer wallets, slapping a flat ₹5 platform fee on all orders in May.

"What’s fascinating is how e-commerce and quick commerce are blurring into each other: the same monetisation models, same ₹5 platform fees, even the same dark-pattern playbook. But mimicry doesn’t guarantee differentiation," said Farheen, an analyst at the Centre for Critical and Emerging Technologies, at Advanced Study Institute of Asia.

"If every app looks and feels the same, advertisers may just concentrate their spends on whoever has the deepest engagement, which right now still isn’t Amazon in quick commerce," she added, highlighting the challenges. "A lot of this is being driven by intrusive formats and borderline dark patterns; nudges that customers don't always realise they’re clicking on. Big platforms can get away with it, but it does raise trust issues in the long run."

In India, Flipkart holds about 34% market share among top online retailers, while Amazon follows with roughly 31%. India’s overall online retail GMV in 2024 was about $60 billion, according to a Bain & Company report. Quick commerce platforms accounted for around 10% of this."