After months of speculation over Amazon’s food delivery foray, an Economic Times report states that Amazon is running pilots across five areas in Bengaluru: HSR, Bellandur, Haralur, Marathahalli and Whitefield. As per the report, the food delivery platform is only open to its own employees as of now.
The report also states that the food delivery business is set to be launched in March and will be offered through its Prime Now app.
Amazon’s Prime Now app is its on-demand grocery delivery app, which is currently available in few cities including Hyderabad, Bengaluru, Mumbai, among others.
With its food delivery foray, Amazon will directly take on Swiggy and Zomato, which currently dominate the market.
There were reports in September 2019 that Amazon was signing up restaurants across the country as it sought to start delivery from October 2019, starting with Bengaluru. A Livemint report at the time said that Amazon was promising low commissions to restaurants in a bid to bring them onto the platform.
The ET report quotes two restaurant executives as saying that Amazon is offering 10-15% commissions and that Prione Business Services, a joint venture between Amazon India and Narayana Murthy’s Catamaran Ventures is signing contracts with brands to list them on Amazon.
Amazon is also reportedly looking to launch exclusive brands in partnerships with restaurants. This would be brands with specialised cuisines including Korean and Japanese.
Responding to TNM’s queries on its food delivery launch, an Amazon India spokesperson said, “We believe in innovating on behalf of our customers to create newer experiences for them. As part of this commitment, we are constantly evaluating new areas and opportunities to connect with and serve our customers. We will come back to you when we have something to announce.”
Amazon’s foray into food delivery comes at a time when Swiggy and Zomato are looking at cutting costs. Zomato, which has been competing with Swiggy recently acquired Uber’s India food delivery business, UberEats India.
Swiggy, on its part, has been expanding its business beyond just food delivery. It recently raised $113 million as part of its Series I funding round led by existing investor Prosus NV. The round also saw participation from Meituan Dianping and Wellington Management Company.
Swiggy said during the fund raise that it aims to use these funds to further develop its new lines of business and continue to invest in new growth areas (Stores, Go and SuprDaily).
Sriharsha Majety, CEO of Swiggy said in a statement that Swiggy is now laser focused on continuing to execute on its vision while building a sustainable path to profitability.