- Amazon enters India online food delivery market even as top local players Swiggy and Zomato lower their workforce to steer the coronavirus pandemic through.
Amazon enters India’s online food delivery market even as top local players Swiggy and Zomato lower their workforce to steer the coronavirus pandemic through.
The e-commerce giant, which has invested more than $6.5 billion in India, launched its food delivery service today in select parts of Bangalore called Amazon Food. Originally, the company had planned to launch the service in India last year, which is then moved to March but pushed it further in the late March Indian government’s nationwide stay-at-home order.
In the run-up to the launch, employees of the e-commerce giant began testing the food delivery service in Bangalore with select restaurant partners,
Amazon Food, which is available through the Amazon brquee app, is currently available in the Bangalore suburbs of Bellandur, Haralur, Marathalli, and Whitefield.
“Customers have been telling us for some time that they would like to order prepared meals on Amazon besides shopping for all other essential items,” a spokesperson said, “This is especially relevant nowadays as they remain safe at home.”
“We also recognize that local businesses need every assistance they can get. We are launching Amazon Food in selected Bangalore pin codes that allow customers to order from handpicked local restaurants and cloud kitchens that pass our certification bar for high hygiene. We adhere to the highest safety standards to ensure our customers stay safe while having a delightful experience, “added the spokesperson.
Amazon’s foray into the food supply market could create new challenges for Proses Ventures — backed by Swiggy — and Zomato, an 11-year-old startup that acquired Uber’s Eats business in India in January this year, and Google-backed Dunzo, which operates in Bangalore and considers food supply as one of its largest parts.
Swiggy and Zomato, having raised over $2 billion together, are still unprofitable and lose more than $15 million each month to acquire new customers and sustain existing ones.
Figuring a profitability path is particularly challenging in India as unlike in developed markets such as the US, where the value of each delivery item is around $33; in India, a similar item carries a price tag of $4, according to estimates by Bangalore-based research firm RedSeer.
Additionally, Zomato and Swiggy, who have created a duopoly in the market, face additional challenges.
Swiggy has let go of over 2,100 employees in the last month and Zomato has eliminated about 520 roles at the company as many people become cautious about ordering food online amid coronavirus outbreak.
