Hyperlocal delivery in India has been a battle-ground for several players, but this battle made sense for those whose sole focus was on the segment. For Amazon, an e-commerce marketplace, the application Prime Now that ran the hyperlocal 2-hour free delivery business of the company has become a sinking ship.
Prime Now promises to deliver products FMCG, grocery, electronics, fresh fruits and vegetables, and kitchen essentials. Now fresh fruits and vegetables are something that people generally like to buy from local sellers because there they can purchase a product they have seen and sized up in real life. It counts for a trust and habit factor. Rest of the FMCG and electronic produce is something that is available on the main Amazon India application as well.
Anyway, Prime now caters to a limited 10 million people who have the paid subscription – Amazon Prime. That makes the scope of the application also restricted.
Apart from this, the app is also facing problems in basic fundamental activities like procuring fresh produce, finding the appropriate list of vendors and securing reliable suppliers. When the app couldn’t sort out these matters and didn’t prove to be convincing in its sale of fresh produce and FMCG products via the separate app, the traction didn’t go up as planned. The logistics and business model wasn’t executed well and the target audience didn’t pay much heed to the app.
At the same time, Swiggy Stores, Dunzo, and BigBasket have been performing well in the segment with their set of customers relying on the applications to obtain the required hyperlocal products.
These factors lead to the obvious call by Amazon to shut down the application. However, it is unclear yet if the app would be shut down completely and the function would be merged in the main Amazon India app, or the global e-comm giant would keep it as a standby app for some a particular few services until the market matures enough to give way for increasing traction on the app.
Amazon, in a larger picture, is also planning to partner with local sellers to become time efficient and minimize the redundancies, as reported by Business Standard.
It only makes sense for the application to do so, as unlike the global especially, US market, India has its unique population that follows a different pattern of consumption than other countries when it comes to tech. This makes replicating the foreign strategy in the country a difficult task.