Amazon expands its online food delivery in parts of Bengaluru and Delhi

Putting speculation of several months to rest, Amazon India has announced its entry into the online food delivery space in a few pin codes in Bengaluru. Several media reports had announced that the Seattle-based giant launched in several parts of the country in May 2020.

In a story reported by YourStory last year, we had mentioned that Amazon had started reaching out to restaurants late last year with an offer to lower commission fee in the range of six to seven percent. This is much lower than the 15-20 percent charged by Swiggy and Zomato.

At present, the food delivery space in India is dominated by Swiggy and Zomato, with the presence of other players like Ola Foods, which acquired Foodpanda India. This isn't the first time an international giant has opened food delivery options in India. In 2017, Uber had opened its food delivery service UberEats in India. The food delivery wing was acquired by Zomato last year.

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“What will help us is that Amazon’s entry gives us the option to break the exclusivity contract with the possibility of expanding our business,” a restaurant owner said in a conversation with YourStory

However, it is an interesting time for Amazon to expand its foodtech services in India. Food delivery as a service has seen a 10-20 percent drop from the second week of March, according to a RedSeer report. This is primarily because restaurants — main places of social gathering — have been shut. 

We had earlier mentioned that according to sources, Amazon will first launch its service in Bengaluru during the Diwali season, and the service will be available on its Prime Now app.

In the earlier conversation with YourStory, Rohan Agarwal, Engagement Manager, RedSeer Consultancy, an analytical firm, had said, “Having multiple players is always good for any ecosystem. The competition ensures that users - both the restaurant partners and end consumers — get better services. It ensures better suppliers, reduces inefficiencies, and the gaps in the market get filled.”