Amazon Food delivery app could pose serious threat to Zomato, Swiggy

Reportedly, Amazon India may be gearing up to launch its own online food delivery division to compete with Swiggy, Zomato and UberEats in the Indian market. According to reports, Amazon India has a capital of Rs 3500 crores reserved for its online food delivery business, which will reportedly be used for coupons and discounts. It seems like Amazon has plans to disrupt the food retail business and gain maximum market share in the segment. It does help that Amazon India already has its existing workforce of delivery partners in place and chances are that Amazon would put its current workforce of delivery partners to use in order to speed up the delivery process and stay ahead of competition.

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Amazon is expanding its India operations by pumping in over Rs 4,400 crore in its various units in India, including marketplace and food retail. This way, Amazon is stepping up more ammunition to compete against Flipkart. Amazon had registered cumulative losses of over Rs 7,000 crore across various units in 2018-19. However, fresh funding is indicative of Amazon's confidence in the Indian market. As per the regulatory filings 'Amazon Corporate Holdings' and 'Amazon.com.incs Ltd' are pumping in Rs 3,400 crore in Amazon Seller Services (marketplace unit), Rs 900 crore in Amazon Pay (India) (payments arm) and Rs 172.5 crore in Amazon Retail India (food retail business).

"...consent of the board be and is hereby accorded for allotment of 3,400,000,000 (340 crores) equity shares of Rs 10 each aggregating to Rs 3,400 crore to the existing shareholder on right basis...," the filing, sourced by Paper.vc said.

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The resolution was passed by the board of directors of Amazon Seller Services on October 14, 2019, it added. Separate resolutions for allotment of 17.25 crore equity shares of Amazon Retail India (aggregating to Rs 172.5 crore), and 90 crore equity shares of Amazon Pay - India amounting Rs 900 crore to Amazon Corporate Holdings and Amazon.com.incs Ltd were approved by the respective boards on October 17, 2019. An Amazon India spokesperson declined to comment on the fund infusion. Amazon founder Jeff Bezos had committed investment worth USD 5 billion in the Indian market in 2016.

Amazon and Flipkart have been pumping in millions of dollars across various operations like marketplace, infrastructure and supply chain management as well as marketing and promotion as they look to strengthen their position in the Indian e-commerce market. Estimates suggest that e-commerce accounts for under 5 per cent of India's retail market but is expected to grow manifold as more and more Indians come to participate in online shopping.

(With agency inputs)