- Amazon has built Rs 3500 crore war chest to fight against its competitors in this new niche
- The platform is launching this Diwali.
- The company is likely to compete with Swiggy, Zomato as it did in Flipkart‘s e-commerce market.
Amazon, the world’s largest e-commerce portal, is set to enter the cut-throat food delivery niche race and take on heads-on the existing biggies Zomato, Swiggy and Uber Eats. This is not new and we have seen similar reports explaining it change in the past. According to the survey, this year the company plans to launch its services at Diwali.
The company is likely to compete as it did in Flipkart’s c-commerce market. Amazon has built Rs 3500 crore war chest to fight against its competitors in this new business field.
Is Amazon India going to win?
The battle for supremacy in food delivery will be fought on multiple fronts, and this could test the incumbents’ mettle in what is a cash-guzzling market.
We’ve changed any industry we’ve joined, whether it’s eCommerce, payments or entertainment,” said a senior executive from Amazon.
One of the main battlefronts, sources said, will be the fee that Amazon charges restaurants to deliver orders to consumers as it tries to win over a critical audience that has been skittish about the food-ordering space practices of corporations.
Amazon has earlier disrupted the Indian e-Com space:
The Seattle-headquartered company launched its India operations in 2013, entering a market where Flipkart was the leader of the country’s most successful startup and fighting off Snapdeal and Paytm’s e-commerce arm. Flipkart was sold to the world’s largest retailer six years later— Walmart and Snapdeal and Paytm no longer have to reckon with.
The Indian Food Delivery Space:
According to Pune-based Market Research Future, the Indian food supply market is forecast to be worth $17 billion by 2023, growing at 16 percent annually. Recently, in the first six months of FY20, Zomato claimed 214 million orders worth $821 million.
Swiggy did not reveal its gross selling price or volumes of transactions. In July, average daily volumes of three million transactions were reported by consultancy Redseer. Food-tech firms owned by ride-hailing companies are marginal players viz. Ola’s Foodpanda and Uber Eats.
So far, Swiggy has raised $1.3 billion, including a $3.3 billion round in December 2018. Naspers from South Africa is the key supporter of the company based in Bengaluru, founded by Sriharsha Majety (CEO), Nandan Reddy, and Rahul Jaimini.
So far, Zomato has raised $750 million at $2 billion, and counts China’s Ant Financial as its major investor. Headed by founder-CEO Deepinder Goyal, the Gurugram-headquartered company is looking for more capital, as is Swiggy.
With Amazon, investors will not have to scout with investments. It’s a great advantage. The $500 million is just the first round of money to build it,” a source said.
Amazon is fantastic in 24-48 hours for quick delivery of goods, but the food is different where minutes matter. Delaying orders can cause severe heartburn for hungry people, and there are other issues as well. Food can not be hot, packaging must be fine, and the food must not be allowed to leak. There is no time to recover from a mistake in output. It will be a scenario to watch how companies like Swiggy and Zomato respond to this move by Amazon. It will also be interesting to watch how Amazon succeeds in fulfilling its promises or not.