Amazon Shifts India Strategy to Profitability Amidst Fierce Competition

In June 2022, India’s cricket board was preparing to auction the media rights to the Indian Premier League tournament, and expectations in Mumbai were stratospheric. Bankers and broadcasters were bracing for a bruising bidding war, and the board itself was counting on one company above all to push prices higher: Amazon.com Inc.

Executives who favoured the deal argued that cricket, one of India’s most potent cultural and commercial properties, would cast a halo over the Amazon brand and further the company’s ambition of becoming the biggest e-commerce operation in the world’s most populous nation. Then hours before the auction, Amazon pulled out — ceding the rights to Walt Disney Co. and India’s Reliance Industries Ltd.

The decision was jarring at the time because Amazon had been scooping up rights for soccer, rugby and tennis around the world. But in retrospect, it heralded a major shift in emphasis. Andy Jassy, just finishing up his first year as chief executive officer, was beginning to lower the curtain on the Jeff Bezos era, when Amazon was prone to making big bets that might not pay off for many years.

By walking away from the cricket rights, which cost Disney and Reliance $6.2 billion, Jassy was sending an implicit message to his team: India remained a priority, but the years of heavy spending and cash burn were over. “It certainly does look like they’ve taken their foot off the gas,” Bernstein analyst Mark Shmulik said in a recent interview.

Amazon’s global expansion has long rested on a simple conviction: capital, logistics and patience could overwhelm local rivals and political friction. Lose money early. Build scale. Dominate later. The strategy has had mixed results — largely paying off in Japan, Germany and the UK but sputtering in China. India, vast, fast-growing and democratic, was supposed to be the ultimate proof that the model would succeed outside the US and a handful of smaller industrialized countries.

Thirteen years later, it’s clear the model hasn’t worked as anticipated. Amazon occupies an awkward middle ground in India. It’s too large to pivot quickly and too constrained to match rivals’ agility. Its brand is trusted, and the Prime subscription program keeps millions of customers loyal. But across the company’s myriad businesses — retail, video streaming, payments, rapid delivery — local rivals have challenged Amazon to a degree it hasn’t experienced outside of China.

Amazon has said its investment in India will surge past $35 billion by 2030, but much of that will go to data centers dedicated to artificial intelligence — not e-commerce. In a telling move, Jassy has asked his India team to focus on operational profitability — a milestone it achieved in the fiscal year through March 2025. Amazon’s India land grab is essentially over.

Jassy’s unsentimental approach to India largely mirrors his strategy for the entire company — cut or streamline projects he doesn’t believe will generate sufficient return and pour resources into ones with more promise, including chips, satellite broadband and, of course, artificial intelligence. Since taking over, Jassy has laid off about 60,000 people, axed multiple bets launched by his predecessor and invested hundreds of billions of dollars in data centers and other AI infrastructure. Wall Street has rewarded his efforts, driving up the shares more than 40% during his tenure.

E-commerce accounts for a tiny fraction of Indian retail, with plenty of room for growth. And Amit Agarwal, Amazon’s senior vice president of emerging markets, says the company will continue funding the operation aggressively. “We are investing what is needed to ensure we have the largest selection, greatest value and fastest speed,” he said in an interview in December. Asked about the decision to forgo broadcast rights for Indian cricket, he said: “Every business should have fiscal prudence. We are rational in our approach but very long-term focused.”

This story is based on interviews with more than a dozen current and former Amazon employees. These people describe an operation that underestimated regulatory headwinds, let valuable acquisitions fall into rivals’ hands and failed to adapt to the complexities of the local market. While local managers operated relatively autonomously when Bezos was chief executive officer, the India business is now run out of the Seattle headquarters, they say.

Some of these people applaud the new discipline, but others say managing remotely has costs, including underestimating the importance of quick commerce — a miscalculation that has left Amazon scrambling to catch up with nimbler local rivals. Teams that once ballooned during India’s hyper-growth phase have been consolidated or merged with global functions, slowing down decision-making, they say. As a result, market tests that once launched in weeks now stretch into quarters.

The prevailing perception inside the company is that Amazon has fallen far behind rivals, according to people familiar with executives’ current thinking. A dearth of quick-delivery fulfillment facilities means orders that are supposed to arrive in minutes take hours to get to their destinations, these people say. In another sign that India is less of a priority for Jassy than for his predecessor, two of the people said, the CEO has declined to visit despite multiple requests from local executives.

A former senior executive says Amazon has a dilemma: It wants to beat local e-commerce champion Flipkart and be profitable. When your chief rival is burning cash and losing money, this person says, it’s hard to see how you can win without doing the same.

In response to a request for comment, a company spokesperson said: “Bloomberg’s inquiry appears to present a skewed picture of Amazon in India that facts simply do not support, overlooking the momentum we continue to see, the role we play in India’s digital economy and the investments we continue to make across the country.”

Amazon’s India debut began modestly in 2013, with a relatively small 140,000-square-foot warehouse in a Mumbai suburb. A team of Indian-born engineers, persuaded to return home after working in Seattle, got the operation off the ground. Agarwal, who ran the team, once recalled that Bezos told them to act not like the computer scientists they were but “like cowboys, who are wild and fast and a little bit rude.”

Bezos badly wanted to win in India after a humbling retreat from China, where Amazon encountered blistering competition from entrenched companies like Alibaba and regulations that favoured incumbents. Bezos’ aim was to become the default online store for India’s aspirational and tech-savvy middle class. It was a laudable — and maybe even doable — goal, but within only a few years it became obvious that Amazon couldn’t simply transplant its e-commerce model to India.

Despite Bezos’ efforts to ingratiate himself with Prime Minister Narendra Modi, Amazon almost immediately ran into the Indian flavour of protectionism. Under the nation’s strict foreign investment rules, the company can’t hold or control inventory. That forced Amazon into a maze of complex partnerships. Each new rule change, such as a cap on total annual sales from one seller on its India website, chipped away at the economics. In 2020, the Competition Commission of India launched an antitrust case, with regulators arguing that third-party local sellers Amazon was working with looked independent on paper but often weren’t in substance.

The regulatory onslaught slowed Amazon down, but its Indian adventure includes several moments when the company appeared poised to seize an opportunity only to hesitate. In 2019, recognizing the need for a brick-and-mortar anchor in India, the company tried to buy Future Group, the nation’s second-largest retailer at the time. But soon after, Indian tycoon Mukesh Ambani’s sprawling Reliance Retail swooped in and took over Future’s stores.

The following year, Bezos had a chance to invest in Reliance Retail. The deal could have let Amazon tie up with a formidable local partner that had government connections and a network of stores across India. Bezos passed because the opportunity offered only a non-controlling stake, and he believed Amazon still had a clear path to dominate the Indian market on its own terms. Today, Reliance owns everything from JioMart, which competes with Amazon on quick grocery deliveries, to JioHotstar, the streaming service up against Prime video. Reliance also has the country’s largest retail network, with more than 20,000 stores and 387 million customers.

Not long before Jassy became CEO in 2021, Agarwal made a bold proposal to carve out Amazon India, list it locally and give it the structural autonomy needed to navigate local rules that restrict foreign control, according to people familiar with the situation. The plan would have sculpted a powerful, semi-independent India unit.

But Jassy was exerting more control, not less. He prioritized profitability and fiscal prudence across Amazon’s sprawling international empire. India, once the company’s growth engine, would be evaluated with the same financial rigour as Amazon’s more mature operations in Europe. People familiar with internal financial targets in India say the message was unmistakable: avoid retail businesses that require capital and invite regulation, and focus instead on toll-booth models that generate fees without the need to own assets.

Agarwal’s proposed spinoff didn’t happen, and before long he was running emerging markets from his base in Silicon Valley. Agarwal’s new job meant he spent less time in India, adding distance between the team there and the ultimate decision-maker.

Manish Tiwary, who had joined from Unilever in 2016, took over day-to-day operations in India. Tiwary brought years of consumer smarts and knowledge of the local market to his new role. But he didn’t win the loyalty or respect employees accorded Agarwal, according to people familiar with the situation.

Moreover, the reporting lines were fuzzy. Some people worked directly for Tiwary in Bangalore; others answered to Agarwal back in the US. When there was a disagreement or a difference of opinion, people tended to go to Agarwal, the former executive says. Inevitably, this slowed down decision-making at a time when surging competition called for nimbleness.

Agarwal denies Tiwary lacked sufficient operational power owing to the reporting structure. “We should not confuse direct oversight with ownership,” he said. “I think Amazon is very good at having ownership and accountability without direct oversight.”

In recent years, 10-minute delivery — popularly known as quick commerce — has upended online shopping in India. A host of local outfits with names like Swiggy and Blinkit have emerged offering speedy delivery, spending heavily to win market share. Amazon didn’t initially view quick commerce rivals offering low-cost grocery items such as eggs and produce as a threat, according to people familiar with the matter. But the alarm bells started ringing when customers began ordering higher-value items, such as smartphones. Meanwhile, Amazon Prime subscribers — typically the company’s most loyal customers — were turning to quick-commerce apps for all manner of goods, a person familiar with the matter said, causing consternation.

Tiwary recognized consumer behaviour was changing but couldn’t persuade his bosses to invest, the former executive says. Agarwal and other US executives argued that quick commerce would never be profitable, this person says. Besides, at the time Flipkart hadn’t committed to quick commerce either.

So Amazon focused on becoming profitable in India and watched as speedy delivery became the preferred option for local shoppers. Looking back, the former executive says, failing to hop on the bandwagon was a big mistake. The prevailing wisdom among Indian analysts is that quick commerce took Amazon by surprise. Agarwal denies it. “It doesn’t surprise us that customers like it,” he said. “It doesn’t surprise us at all.”

Even once Amazon decided to create its own speedy delivery service, it lost precious time by trying to perfect it first rather than rolling it out and fixing the bugs later, one of the people said. Amazon finally entered India’s 10-minute delivery race in the summer of 2025, launching Amazon Now after months of internal development under the codename Tez. The service had been tested in select Bangalore neighbourhoods, initially aimed at Prime members with a tightly curated basket of everyday essentials, before expanding to Delhi in July. The launch was Amazon’s clearest acknowledgment that ultra-fast delivery had moved from a niche experiment to a mainstream urban habit in India’s largest cities.

Unlike Blinkit and Zepto’s expansion blitzes, Amazon has pursued a more deliberate rollout, integrating the service directly into the main Amazon app rather than operating it as a standalone platform. The company operates dedicated dark stores, referred to internally as micro-fulfillment centers, to power Amazon Now. It also relies on More Retail, in which Amazon holds a major minority stake, to fulfill grocery orders.

But many analysts say the company waited so long that it’s now playing catchup. Agarwal won’t even acknowledge having a quick commerce strategy. “We have a speed strategy,” he says. “From the very beginning, Amazon has always been about speed. And we have always said that customers would want large selection at great prices and faster speed.”

While Amazon resets its India strategy, the company’s rivals are sprinting ahead. Flipkart has thrived since being acquired by Walmart Inc. in 2018. The US retail giant effectively outsourced all decision-making, letting the Indian company operate as a largely autonomous platform under local leadership. Flipkart has navigated regulatory shifts, hyperlocal competition and price-sensitive consumers in a way that Amazon hasn’t.

Early on, Flipkart bet big on sales of smartphones, especially to woo the value buyers in India's smaller towns and cities. That's helped the company dominate categories such as electronics and fashion. More recently, the company has moved aggressively into quick commerce through Flipkart Minutes, building a network of more than 850 dark stores across dozens of cities and extending 10-minute