(Image source from: thedrum.com)

Amazon is planning to enter the Indian food delivery market in the coming weeks, said a source who is familiar with the matter to TechCrunch. It has been said that the launch of the service would either be offered as part of Amazon’s Prime or it can be as Amazon Fresh platform and this can take place as soon as next month.

The e-commerce giant Amazon has been working on the business of food delivery for several quarters and it had previously aimed for launching the food delivery business during the festival of Diwali but it has been delayed and the reason that caused the delay is not known.

The e-commerce platform Amazon has been testing it food delivery service with few selective restaurant partners in the city of Bangalore, as said by the source.

The decision made by the e-commerce giant to step into the food delivering business would affect the already existing food delivering apps such as Swiggy and Zomato which is a 20 year old start up and which has acquired business of Uber Eats in India which has been done for in the month of January for about $180 million.

It has been noticed that both the startups are not profitable although they have raised more than $2 billion together. It has been said that both the startups have been losing more than $15 million every month in order to acquire the new customers and also to sustain the existing customers.

Anand Lunia who is a VC at India Quotient has said in a recent podcast that the the food delivery business firms would have to keep decreasing the cost of the food items on their respective platforms as the customers would not be able to afford them if it is not done.

RedSeer, which is a Bangalore- based research firm has made an estimation which says that figuring out a path to profitability is challenging in the country India because when compared to the United States which is a developed market, the value of each delivery item is said to be about $33 and the same item is said to be for $4 in India.

Both the food delivering firms have been extending their business as Swiggy claims to be the largest cloud kitchen network in India and it has also expanded to deliver any item which is not just food where as Zomato has been working on the Project Kisan which is to procure the raw materials directly from the farmers or the fishermen and would supply these to the restaurants.

By Shrithika Kushangi