Putting all the market speculation into rest, Amazon India has entered into the online food delivery business in the country. Seattle headquartered company has been testing the food delivery system in India for a while now and was poised to launch its services in March. Since mid of last year, Amazon has been working on its platform. First of all, Amazon was looking to launch during Diwali, but later it was delayed to December, and later to beginning 2020. The launching of highly anticipated service was further delayed due to the COVID-19 pandemic.
Notably, Amazon has entered this business at a time when two of India's largest online food delivery players Swiggy and Zomato have reported their lowest ever volumes due to lockdown. Its entry is going to affect the margin in a business that is already struggling to sustain.
Bengaluru: first city of operation
The food delivery service of Amazon will be started in selected areas of Bengaluru including parts of Bellandur, Haralur, Marathalli, and Whitefield. As per an official statement by Jeff Bezos led company, "We are launching Amazon Food in select Bangalore pin codes allowing customers to order from handpicked local restaurants and cloud kitchens that pass our high hygiene certification bar. We are adhering to the highest standards of safety to ensure our customers remain safe while having a delightful experience."
As per a report in the Economic Times, the company is planning to expand the services in more cities and with higher density in the coming weeks. "This network will expand to a few cities, with higher density in a few weeks," said a person privy to the development.
High competition in online food delivery space
Zomato and Swiggy, the already existing players in this business have been burning cash for a long time. Even after making a substantial customer base, the two companies are incurring huge losses. Earlier in January, Zomato acquired Uber Eats raising its stake in the online food delivery market. With the entry of Amazon in this business the two existing players will have to tweak their strategies to become profitable.