Amazon Food: Biting into the Food Delivery Market in India

Amazon.com, Inc. (Amazon) India expanded Amazon Food into the food delivery market in March 2021 amid a pandemic and the ensuing lockdown. The move surprised the industry, especially considering that Swiggy and Zomato Ltd. (Zomato), the two key players in the food delivery business, were facing an all-time slump and that restaurants were seeking to move away from aggregators to create their own ordering platform. Zomato and Swiggy, a duopoly in the food service aggregator (FSA) space in the country, had been struggling to keep cash burn low, squeezing delivery-executive commissions, executing mass layoffs, and scaling down profit-draining cloud kitchens. Although the timing of the launch appeared risky, Amazon India’s confidence to take on the established players and challenge the status quo stemmed from its size, reach, resources, technological prowess, reliability, trust, and goodwill. In a market scenario where safety and hygiene standards were set to change forever and the odds were stacked against FSAs, the industry and consumers were expecting a tough battle. Amazon had to reassess whether its strengths would be adequate to help it make satisfactory inroads into the industry, confront the obstacles, and overcome the ongoing slump and make good on its decision to be the new entrant when the established players were bearing the brunt of not only the pandemic but also a deeply divided restaurant industry.

This case is designed for graduate-level marketing management courses covering modules on market entry strategies and competitor mapping. The case is also suitable for a marketing strategy course in modules on understanding the competitive advantage and understanding business models. This case may also be useful in a customer relationship management course to discuss customer experience, unique value proposition, and building opportunities and challenges in a digital world. <br><br>The case analyzes the timing of Amazon’s entry into the food delivery market, the strategies it is likely to adopt to challenge the established players, and the choices it has to make to provide a unique, innovative, and standout experience to customers likely looking for a change. It explores the challenges a huge online retailer faces when entering a highly competitive segment where it has no prior experience, at a time when market sentiment and economic conditions are strongly unfavourable. While the firm possesses certain significant strengths that could prove to be instrumental in its success, there are also issues it must address. Working through the case will give students the opportunity to explore the following issues:<ul><li>The logic behind Amazon India’s entry into the competitive food delivery market.</li><li>The most appropriate business model and targeting and pricing strategies for Amazon Food to find success in India, considering there are different FSAs it can choose from.</li><li>The distinctive value proposition Amazon Food should create for online food delivery customers in terms of “customer experience” as a differentiator.</li><li>The nature and scope of technical and digital capabilities Amazon would need in order to succeed in the online food delivery business.</li><li>The possible obstacles Amazon Foods might encounter on its route to success.</li></ul>

• scale-up
• food industry