Amazon may want to enter the online food order delivery business by taking over Uber Eats from the Indian arm of the US urban mobility major.
Though there is no official confirmation from either side reports indicate early stage talks may be underway at present and nothing concrete has emerged so far. There could be many possibilities including a strategic alliance if not a full buyout. Amazon India first started the Amazon Prime subscription, offering free and speedy delivery of the Prime customers. It then wanted to enhance customer engagement with its site by offering the Prime video service, streaming a variety of entertainment programmes including movies and then commissioning production of India-specific shows etc. In doing all this, the ecommerce giant’s major objective was to make the customers enter its site ever so often and then hoping that even a fraction of those visits results in the customers making some purchases.
Reuters has reported that Amazon is looking to launch its food delivery service ahead of India’s upcoming festive season.
It is now mentioned that this move to add the food delivery portfolio too to the offerings on its platform, the average daily number of visitors to its site will only increase substantially. Many existing Amazon Prime subscribers could be ordering food from Uber Eats or from the larger players, Swiggy and Zomato. Whatever the case, Amazon may not end up being a loser by adding Uber Eats to its stable. Amazon has a membership base of 10 million on its Prime plan.
On the valuation of Uber Eats, it is estimated that it could be in the region of $300 million. Uber has been holding talks earlier too, with the objective of palming off the food delivery business. The basic reason for this is that the two market leaders Swiggy and Zomato have virtually blocked a third entity. Consider this; Swiggy services 800,000 orders a day and Zomato another 650,000. Uber Eats at best manages 200,000 in comparison. Swiggy and Zomato also run some special royalty programmes to lure and retain their customers. Swiggy and Zomato were the frontrunners to take over Uber Eats but the talks failed on the valuation issue.
If indeed Amazon takes over Uber Eats can it elevate the fight and give some competition to the two biggies?