Amazon revamps express delivery service Amazon Now to 'Prime Now'

Amazon, which is yet to launch its pan India operation in food retail after piloting in Pune in February, has rechristened its paid subscription service for grocery offering Amazon Now to Prime Now.

The newly upgraded service will provide Amazon's loyal customers with express two-hour delivery between 6 am and midnight. The e-commerce giant claims to offer over 10,000 products across fresh produce, grocery and home and kitchen items.

Besides, electronic items such as smartphones, speakers, chargers and headphones are also available for the fastest delivery service by the company under Prime Now.

The two-hour deliveries will be available only to Prime subscribers and others customers will be able to avail next-day scheduled deliveries.

Prime Now will continue to fulfill from its third-party partners such as BigBazaar. The items delivered by Amazon’s supply chain are available under the Now category in the app.

The express delivery service claims to have witnessed 100 per cent growth on a monthly basis in the five months since it was launched across four cities including Delhi, Mumbai, Bengaluru, and Hyderabad.

The company has also setup 15 specialised fulfillment centers for ‘Prime Now’ in these cities. These new warehouses have temperature controlled zones, a first for Amazon in India, to store and deliver perishable products.

According to industry estimation, Amazon Now (Prime Now) fulfils more than 2,000 daily orders in Bengaluru.

Challenges ahead for regulators

It would be interesting to see how Amazon segregates the offering under Prime Now from food retail and its marketplace arm. Importantly, it will be a hard task to maintain the consistent scanner for regulating agencies too.

Last month, the company had faced a backlash from the department of industrial policy and promotion (DIPP). The regulator reportedly asked Amazon to separate equipment, machinery, and warehouses for its food products and shouldn’t share anything with its marketplace arm.

For uninitiated, the Seattle-based e-commerce firm had kicked off its food retail vertical through its subsidiary Amazon Retail India and planning to start a private grocery and fresh produce labels in the country.

Indian government allowed 100 per cent foreign ownership in the food retail business in 2016. Amazon Retail India Pvt Ltd is wholly owned food venture of the US giant. In India, it currently offers food products through Amazon Pantry and Amazon Now, which procured from third-party sellers.

Amazon had committed $500 million investment to establish the food retail business, separated from its e-commerce marketplace, and to sell directly to consumers.

Meanwhile, Flipkart is also beefing up grocery vertical which has been dominated by Bigbasket and Grofers. Entrackr had exclusively reported Flipkart's foray into the grocery in new cities such as Hyderabad, Chennai, Delhi, among others.

The development was first reported by ET.