Amazon.com Inc. (AMZN) is starting to offer online food delivery services in India, Reuters reported.
The e-commerce giant will be competing with established players Swiggy and Zomato in a delivery food market that has experienced massive growth in the last few years. The online delivery service, called Amazon Food, will start to offer its services in the southern city of Bengaluru.
Amazon already has a strong foothold in India with its e-commerce business and the food delivery services is a lucrative segment for the company that has been investing heavily in the country.
“Customers have been telling us for some time that they would like to order prepared meals on Amazon in addition to shopping for all other essentials,” an Amazon spokesperson said in a statement.
Food delivery service providers have been struggling as Indians went into the world’s biggest lockdown two months ago when the government tried to curb the spread of the coronavirus, limiting social gatherings and closing down most restaurants and pubs. Rival delivery services companies Swiggy and Zomato have been forced to cut jobs and reduce costs to get through the crisis.
Last year, the Seattle-based company was already planning to enter the highly competitive delivery services market in India, but the move was delayed as the company tried to sort out logistical issues, according to the Reuters report.
Back in 2016, Amazon launched its Prime services in India and already offers services such as video and music streaming as well as grocery delivery in many cities across the country.
Shares in Amazon declined 1.6% to $2,459 in midday U.S. trading trimming its two-month rally to about 47%.
Turning now to Wall Street, analysts have a bullish outlook on the stock. Out of the 41 analysts covering the shares in the last three months, 38 have Buys and the rest are split between 2 Holds and 1 Sell adding up to a Strong Buy consensus. The $2,673.17 average price target implies a modest 8.6% upside potential in the stock in the coming 12 months. (See Amazon stock analysis on TipRanks).