Just when Zomato and Swiggy thought that after the acquisition of UberEats by Zomato, the food delivery market in India is going to be a two-horse race, there is a new surprise waiting for them.
It has been reportedly found out that one more player is set to join the food delivery market in India. The UberEats acquisition by Zomato led everyone to believe that only two contenders will thrive in this domain but sounds like that’s not going to happen with Amazon entering into this market.
As we reported earlier, Amazon was gearing up to launch its food delivery business in India by aciring UberEats. However, after the talks failed there were doubts about Amazon’s plan towards its food delivery business in India.
In January, Amazon surpsied many as the company was found conducting a pilot test for their food delivery business in Bengaluru. Turns out it’s true.
According to another report by a popular news outlet, the food delivery service could be bundled together with Amazon Prime or with Amazon Fresh by next month.
This move by Amazon to enter into the food delivery industry is being considered as a part of a larger plan to build a comprehensive product portfolio which ranges from grocery and food to electronics and home products for its Amazon Prime paid subscription customers.
An interesting detail in this is the fact that Amazon doesn’t happen to be alone. According to a news outlet, during the pilot run, several vendors were signed up by Prione Business Services which is a venture set up by Infosys co-founder Narayana Murthy’s Catamaran Ventures and Amazon.
Executives from two restaurants, who didn’t want to be named, confirmed that the joint venture Prione Business Services have been signing contracts with brands for Amazon by offering 10-15% commissions. These commissions are about half what Swiggy and Zomato charge its partner restaurants.
The venture was initially set up to help small businesses digitize. However, this news doesn’t come across as a coincidence anymore as Narayan Murthy was a guest at the Amazon Smbhav event when Jeff Bezos was in India.
As of now, Amazon’s food delivery platform is operational only to their own employees and pilots are underway across 5 high-density pin codes in Bengaluru namely HSR, Bellandur, Haralur, Marathahalli and Whitefield, according to the executive and restaurant partners.
Amazon To Go Head-To-Head With Both Zomato and Swiggy In India
This move of Amazon’s to enter into the food delivery space comes at a time when Swiggy and Zomato have cut discounts and tightened cost structures and as Uber backed out of the food delivery business in India altogether, having sold UberEats India to Zomato last month in return for a 9.9% stake.
Amazon’s entry into this space could change the game completely. The leading global e-commerce behemoth player has a bigger war chest to compete with others. Jeff Bezos had announced that an additional $1 billion will be invested in India during his recent India visit. This took Amazon’s total investments into the Indian market to a whopping $6.5 billion.
Amazon India’s e-commerce vertical named Amazon Seller Services observed a dip in its losses which came in lower by 9.5% to ₹5,685 crore as of October 2019. Amazon’s revenues also grew by 55% to ₹7,778 crores, even as its total losses in India crossed the ₹7,000 crore mark.