Amazon Streamlines Grocery Delivery; Integrates Pantry Within Fresh Store

Ecommerce giant Amazon India will begin integrating its Amazon Pantry services within its Amazon Fresh store in India to streamline its operations for grocery and household items.

With this move, the ecommerce giant is looking to deliver essential grocery and household items faster to its customers in line with competition such as BigBasket, which also reshuffled its supply chain for four-hour deliveries in certain locations. Prior to this, Amazon Pantry, which sells dry groceries, bulk-buy items and combo packs, and Amazon Fresh, which dealt with daily grocery items, perishable items and household products were two separate entities.

In the earlier arrangement, products added to to the cart would be automatically divided between Pantry and Fresh products. This led to different delivery time slots for different products depending on the store, which is not ideal in cases like grocery delivery. And now, even as it is embroiled in a major controversy with the Reliance-Future Group deal, Amazon is looking to change this and streamline both parts of the business.

Siddharth Nambiar, director of category management at Amazon India said that the integration of these services into a single online grocery store will offer its customers unmatched convenience and value.

Amazon revealed that the new experience will be rolled out to customers in Ahmedabad, Bengaluru, Delhi and Mysuru among others in the next two weeks. For cities and locations in India where Amazon Fresh grocery delivery service is not available, Amazon Pantry will continue operating as usual.

The company launched Amazon Pantry in July 2016, with an aim to deliver the orders within a day. This service was launched to replicate an online supermarket model in competition to Future Group’s Big Bazaar, More and Spencer’s among other modern trades.

Amazon Fresh, on the other hand, was launched in August 2019 in select pin locations in Bengaluru, but only saw surge last year (November 2020) amid the pandemic, where it expanded to other cities like Kolkata, Ahmedabad, Pune and Chennai, and claimed to offer ultra-fast delivery services of daily essentials and grocery.

With its expansion into Fresh store, Amazon India had said that it has more than 25 Amazon Fresh centres with a 3x increase in processing space. Amazon India’s vice president of fulfilment operations and supply chain Prakash Kumar Dutta said that its investment in these specialised centres in inclined with its long-term commitment to invest in India and create hundreds of job opportunities.

Now, with its single grocery delivery platform, the company currently offers customers the option to chose multiple slots from 6 AM to midnight, compared to the four-hour delivery slots offered previously in its Fresh store service. However, the delivery remains the same, where for orders above INR 699, the delivery is free, while below this will be charged a delivery fee of INR 29.

While Amazon has been building its centres from scratch, its arch-rival Flipkart made their second round of investment in fresh produce supply chain startup Ninjacart, after it had announced a joint strategic investment in December 2019. Also, in July 2020, Flipkart introduced its 90-minute delivery service Flipkart Quick, across categories, including groceries, mobile phones and electronics and home accessories, starting with Bengaluru.

According to Inc42, India’s online grocery market had recorded a $1.9 Bn GMV (gross merchandise value) in 2019, and by end of 2020, it had expected to touch $3 Bn GMV. Due to Covid-19 tailwinds for the segment, the online grocery delivery space witnessed a spurt in demand. Online grocery players like BigBasket and Grofers, witnessed a massive surge in demands. For instance, BigBasket had reported a 35% increase in sales in April, while Grofers saw a 60% increase in its GMV, compared to pre-Covid times.