All the major food delivery apps are battling a major slowdown due to the Covid-19 pandemic and the consequent lockdown. Analysts say that food delivery orders are already down 70% and are not expected to grow for a few months. The recovery however depends on how these food businesses deal with the lockdown situation.
However, with the new contactless world, new business models erupt and food delivery will gain a new dimension. There will be different operational models and more and more businesses are looking towards expanding into this domain.
Amazon for instance, is all set to take India’s business game a step ahead by piloting on-demand food delivery, beginning with Bengaluru. This move by the biggest online retailer is most likely to disrupt the more or less consolidated food delivery business. Until now, there was a clear duopoly of the Zomato and Swiggy in India.
As a pilot project this food delivery offering from Amazon will be available in selected areas in Bengaluru – like HSR, Bellandur, Haralur, Marathahalli and Whitefield areas. Jeff Bozos led Amazon has entered into a joint partnership with Prione Business Services with Infosys founder Narayana Murthy’s Catamaran Ventures to pilot the on-demand food delivery business in Bengaluru (source: the Economic Times).
It is reported that the restaurant partners have been offered 10-15 percent commissions to sign up for their service. The launch is to be on the Prime Now app in around March.
The food delivery business had definitely seen a slowdown due to the bottlenecks created during the lockdown imposed by the pandemic. Even Uber Eats withdrew from the business and sold it to Zomato for $180 million. However, with a robust logistics system already in place, Amazon’s food foray will pose a threat to competitors – Swiggy and Zomato.
Amazon however will need to step up investments in logistics, restaurant ecosystem and technology to be able to scale up the food delivery business.
The on demand food delivery business will definitely gain traction in the months to come.