Amazon’s Entry Into The Food Delivery Service A Risk To The Competitors

Amazon has entered into the foodservice sector, making a huge impact on well-known and well-settled companies like Swiggy and Zomato.

Motilal Oswal Financial Services said that Amazon would make a massive difference to both the Zomato and Swiggy in the food services in terms of income or profitability.   

Amazon launched its food delivery services amid pandemic in Diwali. Currently, its food delivery service is only available in limited cities like Bangalore, with 62 accessible pin codes out of 250 pin codes. A year ago, Amazon conducted a few trials for different pin codes. 

The primary role is to consider all the restaurant chains of Bangalore, including all small independent restaurants and the decent or yet to expand restaurants. As far as tying up is concerned, Amazon will actively work with 2,500 restaurants, whereas Zomato is immensely engaged with 15,000 restaurants only in Bangalore.  

The Amazon delivery service is accessible through an in-built Amazon app, which is gettable for customers under the delivery region.

Motilal Oswal’s have appropriately cross-checked a few of Bangalore restaurants, which is engaged with Amazon. Amazon is only taking 10% on every order with tied-up restaurants when it comes to charges. As far as Zomato and Swiggy are concerned, both these companies charge around 22-25%, which is very high compared to Amazon.    

With the exception of early online delivery services, video content, exclusive deals, and audio content, food delivery is on another side, coming under the prime ecosystem. 

As per the press release, Amazon will keep scaling down its delivery rates as its central focus to stay with primer membership, which can be a critical move in the food delivery business.

The latest report says, with the Amazon food delivery business expansion, Zomato can lead to losses.