E-commerce giant, who owns investing more than $ 6.5 billion in India, today launched its food delivery service, called Amazon Food, in parts of Bangalore. The company initially planned to launch services in India last year, which later move to March but pushed it further amid the national order of living in a house released by the Indian government at the end of March.
Ahead of the launch, e-commerce giant began testing food delivery services with certain restaurant partners in Bangalore with employees earlier this year, TechCrunch reported in late February.
“Customers have been telling us for some time that they want to order fast food on Amazon in addition to shopping for all other basic needs. This is very relevant today because they remain safe at home, “Amazon’s spokesman told TechCrunch.
“We also realize that local businesses need all the help they can get. We launch Amazon Food in certain Bangalore pin codes that allow customers to order from selected local restaurants and cloud kitchens that pass our high hygiene certification bar. We adhere to the highest safety standards to ensure our customers stay safe while having a pleasant experience, “the spokesman added. The company did not say how quickly they plan to expand Food throughout India.
Launching Amazon into the food delivery market can create new challenges Prosus Ventures -Strained Swiggy, and Zomato The 11-year-old startup acquired Uber’s Eats business in India in January this year, and Dunzo supported by Google, which operates in Bangalore and counts food shipments as one of the largest parts of its business.
Swiggy and Zomato, after collecting more than $ 2 billion together, are still unprofitable and lose more than $ 15 million every month to get new customers and retain existing ones.
Anand Lunia, a VC at India Quotient, said earlier this year that food delivery companies had little choice but to keep subsidizing food costs on their platforms because if not most of their customers could not afford it.
Finding a path to profitability is very challenging in India because it’s not like in developed markets like the U.S., where the value of each shipping item is around $ 33; in India, similar items carry a $ 4 price tag, according to estimates by a research company based in RedSeer.
In addition, Zomato and Swiggy, who have formed a duopoly in the market, face additional challenges.
In the past month, Swiggy has released more than 2,100 employees and Zomato has been eliminated around 520 roles in the company because many people are cautious about ordering food online amid a coronavirus outbreak. The two startups currently see less than 1 million orders on each platform, down from nearly 3 million each processed earlier this year.
Swiggy has also reduced cloud kitchen operations and several other adjacent businesses. The Bangalore-based startup today began delivering alcohol in Ranchi, a city in the state of Jharkhand. Zomato said today that it will also offer alcohol delivery at Ranchi starting today. Startups have also started sending groceries in the last few weeks.
Amazon has been launched Amazon Prime Now and Amazon Fresh platforms in India to sell perishable goods and foodstuffs in recent years and expand warehouses in several parts of the country along the way.
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