On May 21, Amazon started its food delivery service in India from Metropolitan City Bangalore. The brand name of Amazon’s Food Delivery Service is Amazon Food. In Banglore, today its delivery operations started in select parts of the city. Amazon had been planning to launch the service last year but that then shifted to March, this year.
According to Amazon, the decision to launch its food delivery service in India was taken after there was customers’ demand for the service. During the ‘Stay At Home’ order of the Indian government during Pandemic, Amazon decided to plan the roll-out of the Service.
Previously, Amazon has started Amazon’s Prime Now and Amazon Fresh Platform for online delivery of perishables and grocery items and expanded these two businesses in different parts of India. Now, the new Venture Amazon Food is the newest launch of Amazon in India.
But the launch of Amazon Food has created havoc in the Online Food Delivery Market. As the market’s duopoly businesses Swiggy and Zomato have already been struggling during the Covid-19 Pandemic induced lockdown in India to sustain their businesses. India’s top two online food delivery businesses Swiggy and Zomato are experiencing low business activity during the Pandemic Situation as people are cautioning placing an online food order.
They are receiving just fewer than a million orders per month each than their previous year’s nearly 3 million orders. They were already having trouble acquiring and maintaining the customers in India as many people don’t want to spend their money on online food delivery unless it’s subsidised to be made affordable for them.
Coronavirus made the situation for these businesses even worse as the orders went down more ahead. Uber Eats already exited from the market just a few months back. Both Swiggy and Zomato were coerced to lay off workers owing to loss of business activity and profit. Recently, Swiggy scaled down its cloud Kitchen Operation along with its other adjacent businesses.
More than 2,100 employees of Swiggy and about 520 of Zomato had lost their jobs because of the layoffs, during this 1 month. In such a scenario, facing a new business rival Amazon Food can impact these businesses profit further.
To rebound their business activity, these online food delivery services have expanded their delivery items to Grocery and now they are considering Alcohol as a potential item to be delivered to pick up business activity.