Amazon will be launching its food delivery application in association with Prione Business Services, a joint venture between Amazon India and Narayan Murthy’s Catamaran Ventures, as per reports. Prione Business Services has signed contracts with leading restaurant brands so as to list on Amazon and is offering 10-15% commissions, in contrast, lower to Swiggy and Zomato. It is a good decision by Amazon as there were instances where both the companies have gone too far to maximize their profits and that has resulted in many restaurants complaining. Amazon, for its part, has checked its food delivery app among its employees and is currently serving five pin codes in Bangalore as a pilot. Amazon will offer this service as part of either it’s Prime Now or Amazon Fresh program that is currently running.
Since August last year, when Amazon had talks with Ola’s Foodpanda about a possible partnership or acquisition, there have been whispers about Amazon’s entry into India’s food delivery business. Ola bowed out of the food delivery area in May last year, and instead began to build cloud kitchens. Amazon seems to have again been talking to Ola about a possible relationship with its cloud kitchen business and is also aggressively hiring people with prior experience in running restaurants or cloud kitchens.
As Amazon prepares to enter the food delivery market it is certain that it will once again open up new avenues and better service. Swiggy and Zomato have dominated this industry for a long time now and it was about time that a big player like Amazon tries to disrupt the market. Amazon has played it smartly too as it won’t have to start from scratch to start delivering food — it’s already operating an extensive distribution system that delivers to all pin codes in India, and through Amazon Fresh, it’s also handling hyperlocal deliveries. Adding food delivery to their business will help them increase productivity from their existing delivery business. More importantly, customers will have more choice when it comes to ordering food, as many customers were expecting more out of Swiggy and Zomato but at times both have disappointed. Amazon’s arrival might just tighten them up or will force them to quit like Uber Eats.