Amazon Still Testing Food Delivery In India, But Launch Imminent

After Amazon did not launch its food delivery service despite much speculation last year, some wondered whether the ecommerce giant had changed its mind given the troubles faced by Zomato and Swiggy. But latest reports suggest Amazon is currently conducting a pilot in Bengaluru for its much-anticipated food delivery platform, which is expected to be launched in a couple of weeks.

The platform is just open for Amazon employees currently, but Amazon is underway to expand the pilot to five high-density pin codes across Bengaluru — HSR, Bellandur, Haralur, Marathahalli, and Whitefield.

For now, the company has limited partners on board but will expand once Amazon launches the platform officially. Two restaurant owners also told ET that several restaurants have signed contracts with Prione Business Services to list on Amazon with 10 to15% commission. Prione Business Services is a joint venture between Narayan Murthy’s Catamaran Ventures and Amazon India.

Amazon has been working on the platform since the middle of last year. First, Amazon was looking to launch around Diwali, but later it was postponed to December, and now to early 2020. Amazon’s food delivery business is meant to create a more robust product portfolio, which has everything from entertainment to groceries to electronics, under the Amazon Prime banner.

A top executive in Amazon told ET that the company wants to be at a dominant position in all large categories where “high-value” consumers spend and make repeat purchases “convenient, affordable and seamless,” especially in the top cities.

However, a lot has changed since Amazon decided to enter the Indian food delivery market to actually running a market. For instance, online food delivery platforms have been forced to limit the discounts they offer due to protests from partner restaurants. The US-based company had also leveraged on the resentment of the Zomato and Swiggy’s restaurant partners over commissions to get them listed on its platform.

But in January 2020, Zomato acquired Uber Eats food delivery business in India for $350 Mn to change the face of the market. Even though Uber Eats was a distant third in the Indian food delivery businesses, it had a stronghold in the southern India market where even Zomato is staggering.

“The idea is to only improve the quality of our business and Uber Eats was a step in that direction. It was not about buying a number three player, but buying a number one or number two is some cities where we were lagging behind,” Zomato CEO and cofounder, Deepinder Goyal said.