After the acquisition of Uber Eats by Zomato the online food delivery market has become a two-horse race. The equations, however, are about to change.
Currently, the food delivery space in India is largely dominated by Zomato and Swiggy. However, they are going to face the toughest competition in months to come as Amazon is finally picking up pace in terms of expanding its food delivery business in the country.
On Monday, the eCommerce behemoth revealed that it has expanded its food delivery service called ‘Amazon Food’ to 62 pin code areas in Bangalore. Amazon Food has now been made available to consumers residing in areas such as Kormangala, Indiranagar, MG Road, Whitefield, HSR, JP Nagar, Sarjapur, Frazer Town and more.
There are a total of 462 Pin codes in Bangalore and out of that nearly 250 pin codes are being served by app-based food delivery startup. By starting to serve those pin codes which have a huge impact on revenue books, Amazon has set its priority right.
Amazon has been carefully making moves in the food delivery business in India to avoid meeting the same fate as Uber Eats. Despite entering the food delivery market in India nearly a year ago, its pilot food delivery business was limited to only four zip codes in Bangalore.
Amazon Food: The Gameplan
Now, given that Amazon is somewhat late to the party and also has several odds stacked against it in terms of competition, it seems to have adopted a well-tried and tested gameplan that involves aggressive price undercutting, otherwise known as deep discounting – Indian authorities have reservations against.
Amazon Food, even though it is still limited to only one key area in the overall market in India, has already sounded the war bugle against Zomato and Swiggy.
It is offering food delivery for free of cost to Amazon’s Prime members, while non-members have to pay only a mere Rs 19, which is comparatively a lot cheaper than the fees levied by Swiggy and Zomato in the city.
The U.S e-commerce behemoth, which has committed a whopping $6.5 billion in its Indian operations, in a statement about the expansion, mentioned that Amazon Food has onboarded 2,5000 restaurants and cloud kitchens in Bengaluru.
It also mentioned that customers who choose to order food via Amazon Food be not only able to enjoy several offers from their restaurant partners but also be eligible to receive cashbacks as well.
However, that being said, Amazon didn’t share any comments about why the company has been slower than a snail to expand its food delivery arm in India. The only probable reason that one can think of at this moment is the onset of the global COVID-19 pandemic.
All in all, it’d be interesting to observe how the introduction of Amazon Food in the Indian food delivery space impacts the competition. As mentioned earlier, currently, Gurgaon-based Zomato (which is heading for an IPO) and Bangalore-based Swiggy operate as a duopoly in India, and account for nearly 90% of the market.
It now remains to be seen how Zomato and Swiggy will react to Amazon’s gatecrashing expansion. And if the latter will be able to break up the duopoly and grab up enough market share to establish a firm footing in the country, unlike that of Uber Eats.
Will the game of maintaining a bigger warchest begin again?
We will keep you updated on all future developments. Until then, stay tuned.