Bengaluru maybe the city from where Amazon will launch its food delivery business. According to an Economic Times report, the online retail giant has setup cloud kitchens in Bellandur area in the city and its pilot deliveries may start with the HSR Layout, a residential area close to this location. Amazon Restaurants will be the brand under which the new vertical will operate, and the likely commencement date may coincide with Diwali, that falls in the last week of this month.
Prione Business Services will be the vehicle that will run this business. Prione is a joint venture between Amazon and Catamaran Ventures. As per the report, orders will not be limited to cloud kitchens alone. As reported earlier, Amazon has been holding discussions with some national restaurant chains for some time and luring them with a much lower commission of 5%-6%. The two major players Swiggy and Zomato typically charge a commission of up to 30% for onboarding restaurants on their apps. The two also leverage cloud kitchens with the objective of improving on their overall margins.
Observers and experts are not however overly impressed with the model Amazon is entering the business where there are two established players. Their take is that in the Indian context, you need to have the full complement of services within the food order delivery business to be successful. They feel it will be a huge challenge for the US giant to get the kind of success it plans to achieve. Some people point out how Amazon has not been quite successful at its food delivery/restaurant business back home in the US
From the last-mile delivery perspective, Amazon is planning to use its existing delivery team to handle all three categories, grocery deliveries, the ecommerce packages and now the food deliveries will get added. Amazon has had to close down the restaurant brand and finally make an investment in one of the rival players Deliveroo.
This also comes at a time when existing players Swiggy and Zomato are trying to iron out their differences with the restaurant owners represented by the National Restaurants Association of India (NRAI). NRAI has been up in arms over deep discounting and high commissions charged by these players, which they claim hurt their business.