Amazon to Start Food Delivery Business in India: Threat for Swiggy and Zomato?

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Amazon Food Delivery Business

After Zomato taking over Uber Eats, India’s food delivery market has turned into a duopoly between Swiggy and Zomato. Taking this situation as an opportunity, Amazon India is looking to excel in the business of food delivery. Currently, Amazon is testing its food delivery service on the prime accounts of its few employees. According to the sources, the beta testing is being carried out in Bengaluru and deliveries are only available to a few locations.

As per the report of Bloomberg, Amazon.com Inc. is testing its food delivery service among employees before a full rollout in Bengaluru, according to three people aware of the development, as the retail giant prepares to disrupt India’s meal-ordering market that has turned into a duopoly.

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Amazon to Start Food Delivery Business in India

The sources also said Amazon is currently under the process of making deals with restaurants and food chains across the country and it is also planning to strike a deal with Ola’s cloud kitchen service, Ola Foods.

History of Food Delivery Market in India

In the last few years, many of the food delivery start-up ventures have shut down. Last year, there was a fight between the four companies in this business. The companies that were in the race were Zomato, partially aided by Alibaba Group which mainly specializes in worldwide online retail and wholesale. The other one was Swiggy, affiliated with Tencent Holdings, which specializes in technology. The other two were Uber Eats and FoodPanda. However, last year, Ola owned FoodPanda stopped its services as it was not able to compete with rivals like Zomato, Swiggy, and Uber Eats. Whereas another cab aggregator, Uber owned Uber Eats was recently taken over by Zomato.

This makes a clear way for Zomato and Swiggy to expand its business across the country before Amazon enters the battlefield.

Amazon a Threat for Swiggy and Zomato?

Currently, Swiggy and Zomato are the only two companies who are dominating the food delivery market in India. The success of both services is quite similar. Both of them have a well-versed process of deliveries and a very user-friendly application making ordering food very much easier.

Having success in the food delivery business in India is not that easy. It can be clearly seen that only the fittest survive in this kind of business. It requires lots of investment in the earlier stage and a huge customer base. However, Swiggy and Zomato both have done very well until now to achieve success in this arena.

Amazon to Start Food Delivery Business in India

Talking about Amazon, it is owned by the World’s Richest Man, Jeff Bezos so there won’t be any shortage of funds. And going on to the customer base factor, Amazon also has a huge customer base but it will require various schemes and policies to bring those customers in this venture. The major benefit Amazon holds is that it has a global brand-name and its delivery network is extensive and efficient. The prime thing that Amazon will require to survive in this market is a robust system and good tie-ups will be necessary.

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India: A Land Full of Opportunities

According to various surveys, the Indian online food delivery sector’s revenue is approximately close to $9,207 million. This business sector is currently in its initial days. It is said that the projected growth rate is expected to be around 9.2% in 2020 and by 2024, the market volume will excel in full swing and it will increase up to $13,000 million.

In his recent visit to India, Amazon CEO Jeff Bezos confirmed his plans of investing $1 billion in India. Therefore it is quite evident the Amazon founder is set on increasing the retail giant’s footing in the country.

There is still time for the official launch of this new venture from Amazon. But Amazon is surely going to give a tough time to Swiggy and Zomato once it will enter the business. Until then, both of them have a great opportunity to take full advantage of being the duopoly in the food-delivery market in India.

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Sohil has been with with Above Android since it's inception in 2012. He is also an Adnroid Developer. He not only just writes for the App's section of Above Android but is also developing a new App for Above Android. He has extensive knowledge in this field and puts down detailed information in a very simple and easy to understand way.