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Amazon India Lowers Commissions To Undercut Food Delivery Rivals

food delivery

In a move that could spark strong competition in the food delivery space, Amazon India is said to be promising commissions that will be a fraction of what is charged by Zomato and Swiggy. The company is set to begin its food delivery offering next month, Mint reported.

The company is reportedly signing restaurants up at commissions of 5 to 6 percent, which is a small portion of what Zomato and Swiggy are said to charge at 20 percent or so. One restaurant chain owner in the report, who was not named, said, “They are talking about super aggressive commissions to begin with, and looking at sub 10%. But I am sure they will increase with time. They should ideally be live in next 30 days.”

At the same time, it was noted that Amazon is in the last stages of acquiring the infrastructure of Foodpanda from Ola. “They were talking to multiple players, but the Foodpanda deal is almost done,” said an unnamed source cited in the report. “Since Amazon is going the marketplace route for now, it is acquiring the remainder of Foodpanda’s infrastructure which includes restaurant connections and integration, the menus, order processing methodology, delivery executives, etc.”

Amazon’s entry into the food delivery space has been met with enthusiasm by restaurant chains. They see the platform as providing them with greater leverage when it comes to negotiating terms with Swiggy and Zomato, the two firms that rule the market currently. As it stands, restaurants have been “at loggerheads” with those firms over reportedly high listing charges and restrictive terms.

The news comes as restaurants in India are fighting back against restaurant delivery apps like Swiggy, Zomato  and Uber Eats, saying that the apps are too centered around diners, offering discounts that help buyers but hurt restaurants by cutting into revenue. Some of the restaurants have become a part of a movement with a #logout hashtag that has been popular on social media.

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