Amazon Set to Foray into Food Delivery Business in India

CIOReviewIndia Team | Friday, 28 February 2020, 07:32 IST

Amazon Set to Foray into Food Delivery Business in India

Following its dominance in  e-commerce, cloud computing and digital streaming, Amazon is all set to foray into food delivery business in India, challenging the duopoly of Swiggy and Zomato. Amazon in collaboration with Narayana Murthy’s Catamaran is planning to launch its food delivery services that are already in pilot stage in the next month. With this move, Amazon will create challenges for the established players in the food delivery business. It is quite interesting to see the entry of Amazon into Indian food delivery market following the exit of Uber Eats that was acquired by Zomato recently.                  

A Joint Venture between Narayana Murthy’s Catamaran Ventures and Amazon India

As per the sources, Prione Business Services, a joint venture between Infosys co-founder Narayana Murthy’s Catamaran Ventures and Amazon India, has been signing contracts with restaurants offering commissions of 10-15 percent to list them on Amazon platform. The company is currently testing the services with some selected restaurants in Bangalore offering services to its employees.          

The launch of Amazon’s food delivery services was reportedly postponed twice for unknown reasons. The company has been working on these services from the mid-2019. Amazon’s entry into the food delivery business is a part of their strategy to offer a comprehensive product portfolio ranging from entertainment to groceries to electronics. “We believe in innovating on behalf of our customers to create newer experiences for them. As part of this commitment, we are constantly evaluating new areas and opportunities to connect with and serve our customers. We will come back to you when we have something to announce,” said an Amazon  spokesperson in a statement.

 Though, Swiggy and Zomato have been expanding their customer base in the country, they are still in no-profit zone. Amazon is entering into the scene at a time when both Swiggy and Zomato are cutting down discounts and tightening cost structures. Achieving profitability in India is challenging unlike in the case of developed markets of the U.S., considering the price sensitive nature of Indian market.   In order to take on the established players in the market, Amazon has to make significant investments in logistics, restaurant ecosystem and marketing.

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