Amazon India’s $15 Billion Growth Strategy: Targeting Tier-2 and Tier-3 Cities as Strategic Market Priority

Strategic Importance of India to Amazon’s Global Growth

Amazon continues to view India as one of its most strategically important and fastest-growing global markets, according to Country Manager Samir Kumar, who has returned to lead Amazon’s India operations nearly a decade after helping launch the e-commerce platform in the country. Kumar’s “second innings” comes at a critical juncture as Amazon deepens its investments in what has become a key battleground in global e-commerce.

“India continues to be one of our fastest-growing marketplaces globally, and the leadership team is very pleased with both top-line and bottom-line growth after 11 years of operation here,” Kumar stated, highlighting the market’s importance to Amazon’s global expansion plans.

The e-commerce giant has focused on transforming buying and selling behaviors across India, creating significant economic opportunities throughout the country. By integrating its technology and logistics solutions with local market needs, Amazon has established itself as a critical player in India’s digital economy transformation.

$15 Billion Investment Plans Through 2030

Having already invested nearly $11 billion in the Indian market since its entry, Amazon has now committed an additional $15 billion by 2030, bringing its total investment commitment to $26 billion. This substantial investment underscores the company’s long-term confidence in India’s growth potential despite increasing competition from domestic players like Flipkart, Reliance Retail, and emerging quick commerce platforms.

Kumar explained that this capital deployment spans across all Amazon businesses, including Amazon Web Services (AWS), but emphasized that a significant portion is earmarked for improving service in tier-2 and tier-3 cities. “We’re investing heavily in infrastructure to change that – building more fulfilment centres, expanding our delivery network, and developing a strong two-day delivery promise nationwide before pushing toward next-day service even in remote areas,” Kumar noted.

These investments represent a strategic bet on India’s continued e-commerce growth, with Amazon positioning itself to capture market share across all demographic segments and geographic regions throughout the country.

Tier-2 and Tier-3 Cities: The New Growth Engine

Perhaps the most significant revelation from Kumar is Amazon India’s increasing focus on smaller cities and towns, which now account for 70% of the company’s new customer acquisitions. This dramatic shift toward non-metropolitan areas represents a fundamental evolution in Amazon’s India strategy, moving beyond the saturated urban markets to tap into the country’s vast rural consumption potential.

“They’re critical,” Kumar emphasized when discussing these markets. “While we cover 100 percent of serviceable pin codes in India, what truly matters is how fast we can get there. These markets might not have full access to a wide product range yet, but the aspiration is there.”

To address the unique needs of these markets, Amazon has developed specific initiatives like Amazon Bazaar, launched last year to provide access to products priced below ₹599. “It’s about serving both premium customers and those in the lower-value segments — we need both,” Kumar explained, highlighting the company’s dual approach to market development.

Amazon’s Quick Commerce Strategy for India

Responding to the rapid growth of quick commerce platforms in India like Zepto, Blinkit, and Swiggy Instamart, Amazon has been piloting its own “Amazon Now” service in Bengaluru. Despite being perceived as late to enter this competitive space, Kumar dismisses the notion that Amazon has missed its opportunity.

“I don’t think we’re late at all. The market is still in its early stages — we’re just scratching the surface of its potential,” Kumar stated confidently. “Our ‘Amazon Now’ pilot in Bengaluru is showing very encouraging results. We took our time to figure out the right approach and we will go big in this space.”

While declining to provide specific timelines for the national rollout of Amazon’s quick commerce service, Kumar indicated that the company is actively preparing to scale this offering. “Everything we do is customer-backwards. As I tell my team: ‘As fast as possible, but as slow as necessary.’ You need to move quickly but also ensure that you’re listening to customers. We will do much bigger things on quick commerce very soon.”

“As fast as possible, but as slow as necessary. You need to move quickly but also ensure that you’re listening to customers. We will do much bigger things on quick commerce very soon.”

— Samir Kumar, Country Manager, Amazon India

Global Selling Program: $80 Billion Export Ambitions

One of Amazon’s most successful initiatives in India has been its Global Selling program, which enables Indian businesses to access international markets through Amazon’s global marketplace infrastructure. Currently, 150,000 Indian sellers are exporting products through this platform, with cumulative exports reaching $13 billion to date.

Amazon has set an ambitious target to grow this figure to $80 billion by 2030—a six-fold increase from current levels. “We’re working with Central and State governments, trade bodies, and other partners to make e-commerce exports easier and more accessible for businesses of all sizes,” Kumar explained. “The opportunity to help Indian MSMEs go global remains one of our most exciting initiatives.”

This export-focused initiative aligns with India’s own national priorities to increase exports and support small and medium enterprises, creating a win-win partnership between Amazon’s global infrastructure and India’s manufacturing and artisanal capabilities.

Fintech Strategy and Financial Service Ecosystem

Despite not having achieved the same dominant position in digital payments that it enjoys in e-commerce, Amazon continues to expand its fintech offerings in India. Kumar highlighted that Amazon Pay UPI already serves over 105 million customers, though he acknowledged that UPI alone is primarily a transactional service where “nobody really makes money.”

Instead, Amazon’s fintech strategy focuses on building an ecosystem of financial convenience through products like the ICICI Amazon Pay Credit Card, which has become one of the most widely-adopted cards in the market, particularly among Prime members who enjoy up to 5% cashback. The company’s Amazon Pay Later service has also gained traction by offering users a seamless one-click payment experience.

“We’re expanding our offerings, including lending solutions for our sellers,” Kumar noted. “In the next 6 months, I believe we’ll deliver even more exciting and valuable financial products.” This indicates that Amazon views financial services as a critical complementary business to its core e-commerce operations in India.

Organic Growth vs. Acquisition Strategy

Unlike some markets where Amazon has grown through acquisitions, such as its purchase of Souk.com in the Middle East, the company has pursued a predominantly organic growth strategy in India. When questioned about this approach, Kumar emphasized that Amazon’s strategy is always “customer-backwards, not competitor-backwards.”

“In India, we’ve chosen to build many of our capabilities organically, focusing on creating the right solutions tailored to the needs of the local customer,” Kumar explained. This organic approach has allowed Amazon to customize its offerings specifically for Indian market conditions rather than inheriting legacy systems through acquisitions.

However, Kumar did not rule out potential acquisitions in the future, noting that the company remains “always open to opportunities that align with our values and long-term strategy.” This suggests that while Amazon has prioritized building its India operations from the ground up, it may consider strategic acquisitions if they provide complementary capabilities or accelerate market penetration.

Preparations for the Diwali Shopping Season

As Amazon gears up for India’s most significant shopping event of the year, the Diwali festival season, Kumar shared insights into the company’s preparations. “We are investing in fulfillment infrastructure in places where we previously didn’t have capability. These are coming online as we gear up for what we call the Diwali period,” he noted.

The company has focused on improving selection depth across its warehouses, with Kumar using Amazon.com as his benchmark. “Compared to our global businesses, our assortment has to really grow,” he acknowledged, indicating that expansion of product offerings remains a priority.

Amazon has also lowered seller fees during the peak season, enabling merchants to build larger businesses and offer more competitive pricing during the critical shopping period. “The whole machinery is already in place,” Kumar stated confidently about Amazon’s Diwali readiness.

When questioned about persistent rumors of a potential Amazon India IPO, Kumar dismissed them as “rumors and speculation” without further comment. He similarly declined to provide updates on the company’s ongoing matters with the Competition Commission of India (CCI), noting only that Amazon “abide[s] by all the laws and regulations in the country” and that the matter remains sub judice.

As Amazon continues its investment-heavy growth strategy in India, the company’s focus on tier-2 and tier-3 cities, quick commerce expansion, and enhancing infrastructure represents a comprehensive approach to capturing market share across all segments of the Indian consumer market. With $15 billion committed through 2030, Amazon is clearly betting big on India’s continued importance to its global growth narrative.