Food delivery biz heats up as Amazon set to disrupt Swiggy-Zomato duopoly

BENGALURU: Competition in India's food delivery market is set to heat up as Amazon India looks to enter the business soon, potentially disrupting the Swiggy-Zomato duopoly .

In January, Zomato Media Pvt. Ltd acquired the Indian business of Uber Eats, the food delivery business of the ride-sharing giant, in an all-stock deal, adding a powerful new investor to its shareholder roster in its battle against arch-rival Swiggy for supremacy in India.

E-commerce retailer Amazon is expected to pilot its project of delivering on-demand food in Bengaluru. Its food delivery platform is currently open only to its employees and test-runs are underway across five high-density pin codes in the city, Economic Times reported on 27 February.

Prione Business Services, a joint venture between Infosys Ltd co-founder NR Narayana Murthy’s Catamaran Ventures and Amazon India, has been signing contracts with brands to list on Amazon, offering 10-15% commissions, the report said.

Amazon is expected to offer the service as part of either its Prime Now or Amazon Fresh platform.

An Amazon India spokesperson didn’t respond to queries.

In food delivery, Zomato is locked in a bruising battle with Swiggy that has brought heady revenue growth at the two companies, but also led to heavy losses over the past three years. In the first half of 2019, Zomato and Swiggy were burning $50-60 million every month on discounts, marketing, logistics and other expenses.

Over the past six months, both companies have cut down upon offering discounts. Zomato now burns closer to $20 million a month, Mint reported in October.

Though Swiggy and Zomato both have been on a fund-raising spree, valuations have largely remained flat.

As part of its ongoing Series 1 round, in February, Swiggy raised a fresh ₹804.68-crore ($112-million) led by South African internet giant Naspers. Existing investors, including Beijing-based internet company Meituan-Dianping and Hadley Harbour Master Investments LP, also participated in the round.

Zomato is also raising $150 million from investor Ant Financial, an Alibaba affiliate, at a valuation of $3 billion.