Targeting high-frequency grocery segment, Amazon launches Fresh service in India

Amazon India has introduced its urban food-delivery service Amazon Fresh as it looks to leverage the enormous potential of the online grocery business, a significant frequency driver for ecommerce marketplaces.

Prime Now, Amazon’s two-hour delivery service, will power Fresh, the company said in a statement.

Fresh is an add-on service for Amazon Prime members where they can order a host of products including fruits and vegetables, dairy, meat, staples, packaged food, personal care and home care items in a two-hour delivery slot from 6 am to midnight on Amazon’s marketplace.

Prime members can avail the fast delivery service at Rs 49 per order. Fresh service is currently available on Amazon.in and on the marketplace mobile app for select pin-codes in Bengaluru.

“With Amazon Fresh, customers can experience the convenience and speed of ordering daily essentials on Amazon.in. Now, customers can order the freshest fruits and vegetables as well as everyday grocery and get it within 2 hours. We are starting this service in Bengaluru and will soon roll this out to customers in other cities,” Siddharth Nambiar, director – category management, Amazon India, said.

Prime Now, a free service for Amazon Prime members, operates on a separate app for customers in Delhi-NCR, Mumbai, Bengaluru and Hyderabad. It offers faster delivery services for a slew of products including groceries, household products and select consumer electronics items. 

The Prime Now experience is now available for grocery shoppers on Amazon’s main marketplace app and on Amazon.in.

Amazon brings Fresh to India at a time when horizontal ecommerce platforms are shifting their focus to high-frequency categories, especially the hyperlocal e-grocery market, which is growing at triple-digit rates. 

Amazon is closing in on a deal to acquire a 10% stake in Kishore Biyani-controlled Future Retail, according to several recent media reports. 

Future Retail operates several brands, including the flagship Big Bazaar grocery store chain and Nilgiris supermarkets. 

The US-based retailer had earlier acquired stakes in grocery chain More. 

Amazon is currently working on a restaurant food delivery service, another category that ensures high order frequency and strong customer stickiness.

Flipkart, on the other hand, plans to expand its grocery business to pan-India, including tier-II and III cities. According to a recent report by CNBC-TV18, the Walmart-owned company is in negotiations to acquire grocery chain Namdhari's Fresh, which operates about 30 stores in Bengaluru.

Grocery-delivery firms BigBasket and Grofers lead the market, and both have raised significant venture capital investments over the years.

In their last-known funding rounds, Grofers raised $200 million in a funding round led by SoftBank Vision Fund and BigBasket secured $14.6 million venture debt from Trifecta Capital.

In May 2019, BigBasket had raised $150 million led by South Korean firm Mirae Asset.