Amazon is planning to start its food delivery app this Diwali, which can been seen as the global e-commerce giant’s attempt to disrupt the food aggregator sector as it might offer huge discounts, cashbacks to customers and charge the least commission from restaurant owners.Amazon would leverage its vast retail delivery network for food delivery purposes on a pilot project basis in Bengaluru soon, which would be extended to other cities, according to sources.
The announcement will made likely on Diwali and will be preceded by discussions between major hotel owners and Amazon. The latter might agree to offer a take rate (commission) of 6-10 per cent compared to 20-30 per cent, which food aggregators such as Swiggy, Zomato and Uber Eats charge.
“Amazon considers India as a huge market both in terms of retail and food delivery. Any major announcement during the ongoing festival season cannot be ruled out,” a top executive, Amazon told this publication.
The online food delivery business in India is growing at a CAGR of 16 per cent expected to reach $17.02 billion by 2023, according to a survey by Market Research Future, a business consultancy firm. However, the leading players in the food delivery segment have recently faced backlash of hotel owners accusing them of offering unsustainable discounts to customers, which puts the latter at a huge loss.
The National Restaurant Association of India had initiated a logout campaign against Zomato to protest against its Gold membership programme. The food aggregators are already being scrutinized by the Food Safety and Standards Authority of India over the adherence to the licensing and food safety regulations.
“Amazon really has large shoes to fill but with the hundreds of million dollars allocated to the food delivery segment, disrupting this sector should not come as a big surprise, especially when the e-tailer has a big last mile delivery network in place,” sources revealed.