E-commerce major Amazon has forayed into the food delivery segment in India to diversify its business, much like food tech unicorns Swiggy and Zomato explore other revenue models.
Amazon launches a food delivery service in Bengaluru
Amazon India has chosen Bengaluru to start its food delivery pilot and is currently delivering to four-pin codes in the city.
It is not clear if the firm will expand this service beyond Bengaluru anytime soon.
“Customers have been telling us for some time that they would like to order prepared meals on Amazon in addition to shopping for all other essentials. This is particularly relevant in present times as they stay home safe. We also recognize that local businesses need all the help they can get. We are launching Amazon Food in select Bangalore pin codes allowing customers to order from handpicked local restaurants and cloud kitchens that pass our high hygiene certification bar,” said an Amazon spokesperson.
With select pilots in Bengaluru, Amazon is looking to provide ‘contactless delivery’ of food from local restaurants, around the vicinity of the user.
The past two months have been particularly challenging for large e-commerce players, which were forced to sell only essentials during the nationwide lockdown that began on 25 March.
This led to e-commerce companies along with food delivery players ramping up efforts and in some cases launch deliveries of groceries and other essential items on their respective apps.
Although grocery deliveries count as a high-volume business, margins continue to be thin and dependent on operational efficiency.
The government only eased these curbs on e-commerce in the fourth phase of the lockdown, starting this week, where retailers were allowed to operate and deliver non-essential goods in the so-called red zones as well.
Earlier this month, Amazon, in an earnings call, said its India operations were the worst hit by the COVID-19 pandemic as the government ordered the company to halt sales of almost all items.
“I think the biggest impact internationally has been in India where, of course, similar to all companies, we’re now only fulfilling essential goods such as grocery; so that’s cut back a lot on our offering and we will further expand when the Indian government announces that we’re allowed to resume operations,” Brian T. Olsavsky, senior vice-president and chief financial officer, had said in an earnings call.
Earlier this week, American retailer Walmart, which owns Flipkart, also said net sales for its international business were hit as its Indian subsidiary was unable to make non-essential deliveries during the virus lockdown.