Amazon is ready with a war fund worth $ 500 million (Rs. 3,500 crores) to face Swiggy and Zomato in the food delivery business, signaling a tasty confrontation, such as competing with Flipkart in online retail.
People familiar with Amazon's planning said the fight for dominance in food delivery would be fought on multiple fronts, and that could test the main mood in what is a business that consumes a lot of money.
"We have disrupted all the businesses we entered into, whether it's e-commerce, payments or entertainment," a senior Amazon executive told Moneycontrol.
The launch is scheduled to occur on Diwali.
According to sources, one of the main battlefronts will be Amazon charging restaurants to place orders for customers, seeking to win over an essential group- which is nervous about the action of Amazon in the food ordering business.
The Seattle-based company launched operations in India in 2013, entering a market where Flipkart, the country's most successful startup, was a pioneer and fought the Snapdeal competition and the Paytm e-commerce arm. Six years later, Flipkart was sold to the world's largest retailer: Walmart, Snapdeal and Paytm are no longer forced to think.
The owner of the chain of restaurants that deal with food ordering companies, said that Amazon will charge restaurants a quarter of what the owner's delegate commission. Swiggy and Zomato ship up to 20 percent of restaurants. For participants in your loyalty program: Prime, food will be delivered free of charge.
The American company will install kitchens in the cloud (only for delivery, with no dining option), will strongly employ delivery and reduce the time it takes to deliver food. Other customer benefits will come in the form of lower prices and cashback through Amazon Pay Wallet.
India's food distribution market is expected to reach $ 17 billion by 2023, a growth rate of 16% a year, according to Bonn-based Market Research Future. Zomato recently received 214 million orders valued at $ 821 million during the first six months of fiscal year 20. Swiggy did not reveal the total value of the goods or the volume of transactions. In July, the consulting firm Redseer estimated the average daily trading volume at three million transactions. Whereas, Food technology companies owned by passenger carriers, Foodpanda and Uber Eats and Ola, have a minor impact.
Swiggy has already mobilized $ 1.3 billion, including $ 1 billion in December 2018, for a value of $ 3.3 billion. Naspers of South Africa is the main sponsor of the Bengaluru-based company founded by Sriharsha Majety (CEO), Nandan Reddy and Rahul Jaimini.
Zomato has raised $ 750 million with a valuation of $ 2 billion and the Chinese company Ant Financial is the largest investor. The Gurugram-based company, headed by founder and CEO Deepinder Goyal, is looking for more money, such as Swiggy.
For Amazon, you do not need to look for money from investors. "It's a big plus: $ 500 million is just the first round of money to win it," said one source.
Also, read;- India is Rethinking the Countrywide Plastic Ban
image source-The Silicon Review