Amazon-Flipkart-Paytm Entering Food Delivery Business; Flipkart Launches Grocery Delivery Service

Food delivery is an emerging sector in India and all the big e-commerce companies want to try their hand at the food delivery business. Flipkart, Paytm and Amazon are all trying to acquire or expand their services into the food-delivery business.

With the funds flowing in, these e-commerce companies are trying to follow the global Amazon-model by diversifying investments into a variety of segments to evolve into larger e-commerce conglomerates.

Partnership In Food Delivery Business

All the three big e-commerce giants have separately held talks with the food delivery business leaders Zomato and Swiggy, and cloud kitchen players like Freshmenu, Faasos for investments in the past for a tie-up partnership business. With no successful outcome,Ant Financial also tried to push Zomato and Swiggy into a merger deal with plans to invest in a combined entity. The deal is still stuck due to differences over strategies and valuation, and might never see the day of light.

Hyper-Local Online Commerce Ecosystem

The investors in firms like Flipkart, Amazon and Paytm are trying to enter in the instant food-delivery space to build a better ultra-local online commerce ecosystem which would help them to strengthen their logistics and supply chain management. Amazon is already in talks with hyper-local delivery supermarket company Big Basket, and Alibaba and Paytm Mall are very close to finalizing an investment for grocery delivery. Paytm is also engaged in talks to acquire online coupon websites Nearbuy and Little.

Diversified Investments – The NextGen Conglomerates?

With flowing cash and decreasing market share, all e-commerce companies are trying to foray into a more diversified business model. The companies are eyeing sector-specific online retail stores, travel companies, entertainment ticketing, food and grocery delivery and more. The diversified investments will help the e-commerce giants to emerge as larger internet conglomerates.

Doubling Business

The online food-delivery sector presently has over 12-13 million orders a month, which has doubled since last year. Online retailers have started investing aggressively in the food-delivery industry, since the sector has been projected to reach a domestic market valued at $119 billion by the end of 2020.

Pilot Launch of Flipkart’s Grocery Delivery Service

Flipkart has rolled out the pilot of their grocery delivery service, Supermart on their mobile app, in Bengaluru. Flipkart has been trying to enter into the FMCG sector for a long time now. As of now, they have launched their maiden grocery service in the Garden City for its employees and select customers.

This ultra-local marketplace on Flipkart’s grocery platform has a minimum order value of Rs. 500/-. The free delivery starts on orders above Rs. 1,000/-. The company is trying to make shopping for everyday essentials easy and convenient. Depending on the success of their pilot, Flipkart will take their operations to other cities in the near future.

Amazon Pantry and Paytm

Grocery has been the point of focus for Amazon India since last year. They launched Amazon Pantry, offering grocery and other essentials in select cities, with same-day delivery through their Amazon Now app. They recently tied-up with retailers such as Big Bazaar, Hypercity in some cities and have bought  a major stake in Big Basket. Paytm Mall is also in talks with their main investor Alibaba, for targeting such an ultra-local marketplace.

Flipkart is providing features like open-box delivery (like Big Basket) so that customers can verify products before they accept it. There’s also doorstep returns for faulty products.

It is going to be difficult times ahead for grocery delivery platform leaders Grofers and Big Basket. It will be interesting to see how the big three strategize their markets for food and grocery delivery in the future!