Amazon has entered the online food delivery market in the US as the top local players cut their workforce through the Swiggy and Zomato Coronavirus pandemic and months after Uber Eats left the country. Amazon, the e-commerce giant, which has invested more than $ 6.5 billion in India, today launched its food distribution services in select areas in Bengaluru called Amazon Food. The company originally planned to launch services in India last year, which was transferred in March, but was pushed through a nationwide immigration order issued by the Indian government in late March.
At the beginning of the launch, Amazon began testing the food delivery service with employees at select restaurant partners in Bangalore earlier this year.
An Amazon spokesperson has reported that their customers have been wanting to order ready-made food on Amazon for quite some time, not just shopping for all the other essentials. The report also stated that this measure is particularly relevant in present times as they stay home safe.
In addition to the above statement, the spokesperson also added that they also recognize that local businesses need all the help they can get. They 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.
Further, the spokesperson adds that they are adhering to the highest standards of safety to ensure their customers remain safe and have a delightful experience.
Amazon’s growth in the food delivery market has created new challenges for Procise Ventures-backed Swiggy, and 11-year-old Startup Zomato, which acquired the Uber Eats business in India in January this year, and Google-backed Danzo Bengaluru Food Distribution, is one of the biggest segments of its business.
Swiggy and Zomato together raised more than $ 2 billion, still unprofitable, and are losing more than $ 15 million each month to acquire new customers and retain existing ones.
India Quotient’s VC Anand Lunia said earlier this year that food distribution companies had little choice but to keep food prices on their platforms because otherwise most of their customers could not afford them.
In developed markets, in India where the value of each delivery item is about $ 33, creating a path to profitability is particularly challenging, in India, a similar commodity valuation has a tag 4 price. Redseer is a Bangalore based research institute.
On top of that, Zomato and Swiggy have established a monopoly in the market and are facing additional challenges.
Last month, Swiggy let go of more than 2,100 employees, and Zomato ended 520 roles in the company as many were careful to order food online during the outbreak of coronavirus. Today both startups are seeing less than 1 million orders on their platforms, up from the 3 million they processed earlier this year.
Swiggy has additionally withdrawn its cloud kitchen operations and some other adjacent businesses. Bengaluru-based startup today started distributing liquor to Ranchi city in the state of Jharkhand. Zomato said the liquor will also be distributed to Ranchi later today. Startups have started delivering groceries in recent weeks.
Amazon has recently launched Amazon Prime Now and Amazon Fresh Platforms in India to expand its warehouses in many parts of the country.