In a move that could interrupt the duopoly of Zomato and Swiggy, competition in the food delivery space in India could intensify as Amazon India reportedly aims to enter the industry in the near future. The eCommerce merchant is forecasted to test its on-demand food effort in Bengaluru, livemint reported.
Amazon India’s food delivery system is currently only available to workers. Pilots are taking place throughout five high-density areas in the municipality. Amazon is forecasted to provide the offering as part of Amazon Fresh or Prime Now. According to the report, a representative for Amazon India did not reply to queries.
A joint venture with Amazon India and Catamaran Ventures, Prione Business Services, has reportedly been inking deals with brands to list on Amazon with commissions in the range of 10 percent to 15 percent. Zomato has been engaged in a battle with Swiggy that has caused “heady revenue growth,” per the report, but has also brought about strong losses during the prior three years.
Reports surfaced in January that Uber was selling its money-losing food delivery service in India to its competitor Zomato for a 9.99 percent business stake. The rideshare giant also recently dumped ventures in China, Russia and Southeast Asia to maintain its promise to turn a profit and get rid of money-losers.
Two sources told reporters at the time that the Zomato deal valued Uber Eats India between $160 million and $200 million. Forrester Analyst Satish Meena told reporters that even with the Uber deal, Zomato’s local rival Swiggy has a larger cut of India’s food delivery business.
Zomato, which was founded in 2008, was valued at $3.55 billion earlier in January. Uber CEO Dara Khosrowshahi said in a statement, “India remains an exceptionally important market to Uber, and we will continue to invest in growing our local Rides business.” Ola is Uber’s biggest ride-hailing competitor in India.