Jeff Bezos and Narayana Murthy are entering the food delivery market together in India

• Amazon is running a pilot for food delivery in Bengaluru.
• It is being run by Prione Business Services – a venture set up by Infosys co-founder Narayana Murthy’s Catamaran Ventures and Amazon.
• Murthy was also a guest at the Amazon Smbhav event in January, when the big boss Jeff Bezos was in town.

Just when Zomato thought it had reduced competition in the food delivery sector to a two player market from three players after UberEats acquisition, there is bad news. There’s a new entrant in the market – Amazon.

After many rumours, Amazon has begun a pilot test for its food delivery business in Bengaluru. According to a Techcrunch report, the food delivery offering could come through Amazon Prime or Amazon Fresh by next month.

Interestingly, Amazon is not in it, alone. In the pilot, according to ET several vendors were signed up by Prione Business Services – a venture set up by Infosys co-founder Narayana Murthy’s Catamaran Ventures and Amazon. The venture was set up to help digitize and scale up India’s small businesses.

It was no coincidence that Murthy was a guest at the Amazon Smbhav event in January, when the big boss Jeff Bezos was in town.

Zomato vs Swiggy squabble will now see Amazon have a piece of the pie

Zomato acquired UberEats in January 2020, giving Uber a 9.9% stake in the food delivery company. While sources claimed that Zomato will take its market share to 55% with the deal, a source told Business Insider that Swiggy’s revenue share continued to be at 60%.

However, the struggle remains that food delivery is not yet a profitable venture. For this reason, Indian ride hailing unicorn Ola had exited the game and switched to a cloud kitchen model.

But now, Amazon’s entry could change the game. The leading e-commerce player has a lot of money in the bank and also room for cashburn.

During his visit in January, Bezos had announced a $1 billion additional investment into India. This took its total investments into the Indian market to a whopping $6.5 billion.

As of October 2019, Amazon India’s e-commerce vertical – Amazon Seller Services saw a dip in its losses which came in lower by 9.5% to ₹5,685 crore. Amazon’s revenues also grew by 55% to ₹7,778 crore, even as its total losses in India crossed the ₹7,000 crore mark.

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