- February 29, 2020 / 3 min readAfter stepping into the digital entertainment industry with Prime Video, Amazon is all set to enter the Food Delivery Industry
The robust growth of the online food delivery industry in the recent years is not unknown to us. It has not only been expanding our food choice at our convenience, but the very fact that it offers a wide array of restaurants with a single tap of their mobile phone is something that makes it noteworthy.
After huge investments in a two-hour delivery supply chain for Amazon Now portfolio, Amazon is now piloting its much-anticipated project of food delivery in select localities in Bengaluru. With Swiggy and Zomato being the primary keys players in the industry, the entrance of a new player, Amazon is surely going to be a game-changer in the industry in terms of rise in competition or change in logistics.
Amazon has constantly been covering new areas of business to its platform ever since its existence. And this new move to enter the food delivery industry is surely a part of building a comprehensive product portfolio. In times when Swiggy and Zomato have cut discounts and tightened cost structure, it would be noteworthy to witness the steps they would take to keep their foot in place.
The Challenge that comes with Amazon
Amazon’s entry into the food delivery market would create new challenges for Prosus Ventures-backed Swiggy and Zomato. Both the startups, having raised more than $2 billion together, are still not profitable, losing more than $15 million each month to acquire new customers and sustain existing ones. Figuring a path to profitability might take some time in a country like India. Amazon’s established image in the market guarantees no surety of its success as Swiggy operates in more than 520 cities in India and maintains a partnership with over 160,000 partners.
With proper logistics and strategic approach, dynamics might change for both existing and the new player Until then, it would be interesting to watch how Amazon will use its base to attract customers and what strategy would Swiggy and Zomato undertake to retain their existing customers.
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