Ads fuel one-third of e-commerce giants’ earnings

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Advertising has evolved from a side stream to a central revenue pillar for India’s e-commerce leaders. In FY25, ad revenues accounted for 28% of Amazon India’s total revenue and 31% of Flipkart’s, according to RoC filings compiled by Tofler. Combined, the two generated roughly ₹15,500 crore ($2 billion) from ads — making retail media the third-largest digital advertising segment after search and social.

Over five years, ad income has outpaced marketplace growth. Amazon’s ad revenue rose 110% from ₹3,940 crore in FY21 to ₹8,342 crore in FY25, while Flipkart’s soared 350% to ₹6,310 crore in the same period. Analysts say these gains reflect deep ad-tech integration, where sponsored listings, videos, and contextual placements influence purchase decisions in real time.

“Retail media now drives both performance and brand building,” said Vaibhav Jain, Head of Media at First Economy. “It reaches consumers at the moment of intent, not just awareness.”

FMCG, beauty, and electronics remain top ad categories, but fintech, wellness, and D2C brands are rapidly joining in. Quick commerce players like Zepto (₹1,000 crore), Blinkit (₹400 crore), and Swiggy Instamart are also emerging as retail media powerhouses.

Experts note that advertisers are shifting budgets away from social platforms to e-tailers, drawn by measurable ROI and first-party data. “E-commerce advertising is no longer conversion-only; it’s a discovery and trust-building space,” said Nimesh Shah, Head Maven at Windchimes Communications.

With AI-led targeting, live commerce, and gamified offers, retail media is now the beating heart of India’s digital ad economy.