New player in town: Amazon starts food delivery project in Bengaluru

The development comes after the two major players in the online food delivery business in India — Swiggy and Zomato are locked up in an intense battle over market capitalisation.

Published: 28th February 2020 10:54 AM  |   Last Updated: 28th February 2020 10:54 AM   |  A+A-

food, junk food

For representational purposes

Express News Service

BENGALURU:  E-commerce giant Amazon has reportedly started a pilot project of its food delivery businesses in selected pin codes of Bengaluru as well as for a section of its own employees and is signing up restaurant partners on its platforms. Sources privy to the development told this publication that a major announcement about the food delivery business is likely to come in March.

The development comes after the two major players in the online food delivery business in India — Swiggy and Zomato are locked up in an intense battle over market capitalisation and turning into profitable ventures.

According to analysts, Amazon will have to pump in millions of dollars for its food delivery segment, to strengthen its delivery fleet and marketing strategy to acquire a major stake in the hyper-competitive market expected to cross $16.02 billion by 2023. “We believe in innovating on behalf of our customers to create newer experiences for them. As part of this commitment, we are constantly evaluating new areas and opportunities to connect with and serve our customers. We will come back to you when we have something to announce,” Amazon India told this publication in response to an e-mail query.

Currently, the e-commerce major allows its prime users to order food availing Amazon pay services by redirecting it to either to the restaurant website or on Swiggy through which the e-tailer major offers exclusive offers and cashback.

Sources revealed that Amazon is, in fact, planning to cut down the commission from restaurant partners by 15-16 per cent of the usual market rate, that may hit rivals such as Swiggy and Zomato. Last week, Swiggy that claims to have a 60 per cent market share in the food delivery space raised $113 million from the existing investor, Naspers in a $150 million funding round raising its valuation to $3.5 billion.

The development came after Zomato valued at $3 billion acquired Uber Eats for $300 million in an all-stocks deal.  Both the food technology companies have now cut down on deep discounts with a focus on the aggressive customer acquiring tactics as well as further consolidation of the customer base.

Sector update

  •  Swiggy raised $113 mn from Naspers in a $150 mn funding round 
  •   Earlier, Zomato acquired Uber Eats for $300 million in an all-stocks deal


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