HIGHLIGHTS
- Amazon could emerge as a food delivery service in India in March
- The move comes after Swiggy and Zomato have cut their discount prices and tightened their cost structures
- The company has reportedly been working with their select restaurant partners in Bangalore to test its food delivery service
After Swiggy and Zomato, Amazon is set to enter India’s food delivery market from March onwards. Amazon, already tech-giant plans to expand its user base through these services. The service could be a part of either Amazon’s Prime Now or Amazon Fresh Platform, TechCrunch reports.
The company has reportedly been working with their select restaurant partners in Bangalore to test its food delivery service. It was to launch its services during Diwali but there is no clarity as to what caused the delay. It is interesting to note that Swiggy is also headquartered in Bangalore.
In 2016, Amazon launched its Prime services and offered services such as video and music streaming as well as groceries delivery.
We believe in innovating on behalf of our customers. As part of this commitment, we are constantly evaluating new areas and opportunities to connect with and serve our customers, an Amazon spokesperson told Economic Times (ET)
Amazon’s food services entry would give competition to existing services Swiggy and Zomato, a 10-year-old start-up that acquired Uber Eats in January. Uber sold its delivery business for a 10 per cent stake in the company.
Having said that, one cannot ignore the fact that Swiggy and Zomato have drawn a large customer base in the past few years. However, both start-ups are still not profitable despite raising $2 billion together, TechCrunch reports. Swiggy and Zomato lost $15 million as they have to take efforts to retain existing consumers and attain new consumers.
In fact, they have gone beyond their food delivery businesses. Swiggy claims to be one of the biggest cloud kitchens in India and Zomato has been growing as a food service over its 10 years of service.
The timing of the launch may or may not have been strategic. The report by ET suggests that Amazon food service is being launched at a time when Swiggy and Zomato have cut discounts and tightened their cost structures.
Zomato, over the past few months was facing challenges where partnering with restaurants was concerned. Almost one-third of the restaurants started opting out of the Gold programme that the startup offered. The gold service was supposed to be a win-win for restaurant partners as well as Zomato. Not before long, restaurants started opting out of this service because Zomato was supposed to make the offer available for a limited number of subscribers but opened it for everyone.
