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Online Food Delivery Service To Be Launched In India Soon By Amazon: Sources


07/29/2019


Online Food Delivery Service To Be Launched In India Soon By Amazon: Sources
Amazon.com Inc is contemplating getting into the online food delivery business in India by this year, claimed reports citing information from sources who has knowledge of the developments. The foray of Amazon into the online food delivery business in India would mean an increase in competition in a market segment that is already rife with competing companies trying get a greater slice of the market.
 
According to the news reports, as a part of its preparations to enter the industry,  the Seattle-based company is currently collaborating with a local Indian firm called Catamaran which was founded by IT industrialist Narayana Murthy. Reports suggested that the process of hiring staff for the new operation has already been started by Amazon.
 
The reports further claimed that the aim of Amazon is to start operations of the business – which will deliver food from restaurants that have been ordered online, before the month long festive season in India around the month of September this year. 
 
The online food delivery sector in India has seen significant growth in the last few years driven by a rising middle income class in India. According to data from the research firm RedSeer Consulting, there was a growth of 176 per cent in the number of order placed online in 2018 compared to the previous year.
 
However, companies operating in the sector are finding it hard to make profits. Domestic India startups Zomato, which has Sequoia as one of its investors, and Swiggy, which is supported by by Naspers and Tencent, currently dominates the market in India.
 
In 2017, a online food delivery service was launched by Uber Technologies in India but has found it difficult to complete with the domestic startups in the Indian market.
 
On Monday, a news report published in the Indian daily newspaper Business Standard claimed that talks are currently underway between Amazon and Uber for the purchase of Uber Eats. There is however no official confirmation by any of the companies on the issue. There has also been no comment available on the plans of Amazon from Catamaran
 
The Indian online food delivery industry has also drawn in Uber’s Indian rival Ola which launched its own food delivery service by acquiring Foodpanda in 2017. The Indian ride hailing company however is currently changing its business model and is shifting away from marketplace deliveries and trying to build up its own kitchen based delivery services.
 
Stiff competition in the food delivery market in the United States forced Amazon to close down its food delivery operations there last month.
 
Reports claimed that one of the aims of Amazon in establishing the food delivery service restaurants and takeaway food outlets is to attract more customers to the other services that it offers.
 
Its Prime services was launched in India by Amazon in 2016 and it already offers a host of services including its video and music streaming as well as groceries delivery in a number of major cities in across India,
 
In its core business segment – e-commerce, Amazon has been facing stiff competition from India startup Flipkart, which was acquired by Walmart Inc earlier this year.
 
(Source:www.reuters.com)


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