It’s already known that Amazon is planning to launch its own food delivery service in India, however, nothing has materialised so far. But if the new report is to be believed, then the eCommerce giant is all set to launch the service around Diwali.
The report claims that Amazon’s food delivery business will be operational in India around Diwali and the company is expected to invest around $500 million to get the business started to take on the likes of Zomato and Swiggy. While it has not been confirmed with which cities the company will start this new business, we expect it to be limited to select cities initially, most probably with Bangalore.
To undercut competition, the company will reportedly charge lower commission rates to the restaurants. The report cites a restaurant chain owner who claims that they were charged only one-fourth of what other players in field charge. Currently, Swiggy and Zomato — the dominating players in the market charge around 20 percent from restaurants.
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Further, the report adds that Amazon will be adopting Swiggy’s strategy of deploying cloud kitchens that only offer food delivery service and no dine-in facility. Amazon will also start an aggressive hiring process for new delivery agents in order to reduce delivery times. To lure customers, the company is expected to offer reduced pricing and cashback schemes linked with the Amazon Pay wallet.
India’s food delivery market is booming right now and is forecast to be worth $17 billion by 2023. Swiggy, which has raised around $1.3 billion in funding so far, is perhaps the largest player in this segment in India, with a valuation of around $3.3 billion. On the other hand, Zomato has raised around $750 million having valuation of $2 billion.
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(Via)
