Amazon enters Indian food delivery market; initially in Bengaluru

Amazon India on Thursday said it is launching its food delivery operations in select parts of Bengaluru, a move that will see the e-commerce giant compete against major players like Zomato and Swiggy in the country.

The announcement by Amazon India - which has been testing the service for a few months - comes at a time when Zomato and Swiggy have announced laying off over 1,600 employees amid the COVID-19 pandemic.

"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 recognise that local businesses need all the help they can get," an Amazon India spokesperson said.

The company did not elaborate further on its expansion plans in the Indian market.

The spokesperson added that Amazon Food will be launched in select Bengaluru pin codes. "...allowing customers to order from handpicked local restaurants and cloud kitchens that pass our high hygiene certification bar. We are adhering to the highest standards of safety to ensure our customers remain safe while having a delightful experience," the spokesperson said.

The service will initially be available in four pin codes in Bengaluru - Mahadevapura, Marathalli, Whitefield and Bellandur covering over 100 restaurants. These include outlets like Box8, Chai point, Chaayos, Faasos, Mad Over Donuts as well as restaurants from hotel chains like Radisson and Marriott (Shao, Melange and M Cafe among others).

The orders can be placed through Amazon app but the option will currently be visible to customers in the live pin codes.

Amazon has been testing food delivery service in India among its employees for over six months.

Amazon's entry in the food delivery space could be a major challenge for Zomato and Swiggy that occupy a majority share of the food delivery market in the country. Earlier this year, Zomato had acquired the Indian business of Uber Eats to strengthen its position in the Indian market.

However, the nationwide lockdown (which started March 25) and resulting impact on business of restaurants has forced Zomato and Swiggy to restructure their business.

In a blogpost last week, Zomato Founder and CEO Deepinder Goyal had said multiple aspects of the company's business have changed dramatically over the last couple of months and many of these changes are expected to be permanent.

"While we continue to build a more focussed Zomato, we do not foresee having enough work for all our employees. We owe all our colleagues a challenging work environment, but we won't be able to offer that to around 13 per cent of our workforce going forward," he had said.

Swiggy had said the COVID-19 pandemic has "severely impacted" its core food delivery business and this will continue to be the case over the short term. It has also said it will scale down its cloud kitchen operations as well.

Interestingly, Swiggy on Thursday said it has started home delivery of alcohol in Ranchi and is in talks with various state governments to provide support with online processing and home delivery of alcohol in their states.