E-commerce giant Amazon has entered the world of food-delivery business in Bengaluru amid cut-throat rivalry in the space by established players like Swiggy and Zomato.
With huge investments made in the two-hour delivery supply chain for Amazon Now portfolio, the US e-commerce mogul is now putting to test its much-anticipated project of delivering on-demand food to select localities in Bengaluru. Amazon’s entry to the food delivery business comes at a time when Uber has backed out of the food delivery business in India and Swiggy and Zomato have tightened cost structures.
Uber sold UberEats India to Zomato just last month in return for a 10% stake.
By entering the food-delivery domain, Amazon plans on building a vast,comprehensive product portfolio – starting from grocery and food to electronics and home products – for its top customers who have availed of its Amazon Prime paid subscription service.
“The intent is to capture all large categories where high-value consumers spend and make repeat purchases convenient, affordable and seamless, especially in the top cities,” a top executive at the firm said.
For now, Amazon’s food delivery platform is open only to own employees and pilots are under way across five key pin codes in the city –HSR, Bellandur, Haralur, Marathahalli and Whitefield, according to the executive and restaurant partners.
Sources also confirmed that Prione Business Services, a joint venture between Infosys cofounder NR Narayana Murthy’s Catamaran Ventures and Amazon India, have been signing agreements with brands to list on Amazon, offering 10-15% commissions.
The launch of the business is scheduled in March and the service will be rolled out on the Prime Now app.
According to sources, the initiative is led by Raghu Lakkapragada, director-product management, at Amazon.
Last week, Swiggy raised $113 million, led by South African internet giant Naspers, an existing investor. This was after a few weeks of Zomato acquiring UberEats India for about $350 million.
Amazon will have to make promising investments in logistics, restaurant ecosystem, technology and marketing to expand its food delivery business, in order to take on Swiggy and Zomato.