Amazon to enter the food delivery space with Prime Now

Amazon is looking at using Prime Now, its two-hour delivery platform, for its venture into food delivery business in India. With the addition of a food delivery segment to its Prime offering, the company will not only bring in more daily users but also boost the number of transactions.

Amazon India has also held preliminary discussions with Foodpanda, Ola's food delivery unit, for a partnership that could be later extended to an acquisition. It has further approached Uber Eats for the same.

Prime Now, earlier known as Amazon Now, is likely to be used as a platform concentrating on high-frequency use cases of food and grocery delivery.

A source aware of the development said, “Amazon has spent some time debating whether to build food delivery from scratch or go for partnership and investments. They seem to have opted for the latter. They have held talks with both Uber and Ola for it. Prime Now cannot be sustained just on the grocery delivery as the logistics team has questioned inefficient utilisation of delivery fleet for the express delivery platform.”