Sources: Amazon is planning to launch a food delivery service in India in September with a local partner, Catamaran, and has begun hiring staff
BENGALURU (Reuters) - Amazon.com Inc is planning a foray into the burgeoning online food delivery business in India this year …
Context & Ripple Effects
This report opens Amazon's India food-delivery arc: weeks after announcing that Amazon Fresh would bring two-hour grocery delivery to Bengaluru, sources say the company is hiring staff for a September food-delivery launch built around a local partner, Catamaran. The grocery beachhead and the food-delivery plan are one strategy — dense Bengaluru logistics first, then adjacent categories.
What followed validates the entry and frames its ceiling: Amazon moved to a March 2020 timeline charging restaurants commissions of 10-15%, about half of Swiggy's and Zomato's rates, launched Amazon Food in Bengaluru in May 2020 — and then, per later coverage, decided in November 2022 to shut the business down that December as part of a broader restructuring.
First-order effects
- Swiggy and Zomato face their first well-funded foreign entrant in Indian food delivery, with Amazon able to subsidize rider networks and discounts out of an existing Prime and logistics base.
Second-order effects
- Amazon's willingness to undercut on take rates pressures Swiggy and Zomato's commission economics at precisely the moment both are burning cash on discounting, forcing a choice between matching prices and defending margins.
Third-order effects
- Even deep pockets and cross-subsidized logistics did not crack the incumbent duopoly — Amazon exited within three years — suggesting India's hyperlocal food delivery rewards local operational scale over global platform strength, a lesson for any foreign entrant weighing the market.
The trend: Global platform companies keep testing India's food-delivery duopoly with subsidized entries, but local incumbents' unit economics have so far absorbed every challenge.