As Amazon fulfils on its own, Supermarket chains on Prime Now see plunge in orders

Amazon India hyper-local grocery delivery platform Prime Now is seeing a downfall in orders for Supermarket chains selling on its platform.

Daily orders have reduced to halved for several stores of Big Bazaar, Star Bazaar, Modern Bazaar and Spar. Many of them have delisted half of their stores owing to significant drop in orders in the past six months, said ET report quoting sources.

Supermarket chains Big Bazaar and Spar daily orders plunged to 800 and 50-60 respectively. Star Bazaar due its huge drop in order has phased out its stores from the platform, added the report.

However, Amazon Now overall daily shipment climbed to almost double in the last ten months. According to a spokesperson for Amazon said Prime Now’s business has grown by over 250% since last year.

As per sources in the report, drop in orders is happening because Amazon is pivoting from hyper-local delivery to full-stack model. It is trying to push every order through Now store to have more control over high-frequency category and grocery business.

In February, Amazon launched 15 fulfilment centers for grocery. In May this year, Amazon had revamped it express delivery service Amazon Now to ‘Prime Now’. It claimed to provide Amazon’s loyal customers with express two-hour delivery between 6 am and midnight.

The e-commerce giant offer over 10,000 products across fresh produce, grocery and home and kitchen items.

Amazon has been trying to do grocery on its own via standalone app Now. It is another matter that it didn’t get much success owing to challenges in supply chain.

It has been making every move to win grocery segment, which is said to be next frontier for e-commerce players in India.

Last week, Amazon reported to be teaming up with Samara Capital and Goldman Sachs to buy the Aditya Birla owned grocery chain More.

For US e-tailer, this makes sense as the online retail giant has already invested $500 million in a subsidiary in India that sells packaged food. If the deal with More pushes through, it’s going to be Amazon’s second direct investment in the country’s physical retail space.

More has 613 stores and Reliance Retail that operates with half a dozen subsidiaries has over 3,700 stores, they can give ready-made wings for opening a grocery and other essentials in almost no time.