Amazon Pantry, a grocery and household item delivery service from Amazon India, has expanded its services to 7 more cities in the last 20 days.  It now has services available in a total of 34 cities. Note on May 3, MediaNama had reported on how Amazon Pantry had expanded services to 13 more cities in three months. The Pantry service was launched in July last year in Hyderabad, by the end of January 2017, it had expanded to 14 cities.

The Amazon Pantry service allows users to fill a box with a maximum capacity of 15 kg, with items from across six categories: cooking essentials, personal hygiene,  household supplies and pets, snacks and beverages, haircare and skincare and baby products. It guarantees next day delivery and charges Rs 20 per box as delivery charges. It is free for Amazon prime members.

The new cities added in the last 20 days are Dharampuri, Kamam, Nasik, Rhotak, Salem, Sonepat and Tumkur. The company’s website says “we will expand to more cities in the coming months.”

Currently, Amazon Pantry is available in  Ambala, Bangalore, Chandigarh, Chennai, Dehradun, Delhi, Dharmapuri, Faridabad, Ghaziabad, Gurgaon, Hyderabad, Jaipur, Kanchipuram, Khammam, Kolkata, Mangalore, Manipal, Mohali, Mumbai, Mysore, Nashik, Noida, Panchkula, Panipat, Pondicherry, Pune, Rohtak, Salem, Secunderabad, Sonepat, Tumkur, Vellore, Vijayawada, Warangal. 

Amazon’s KiranaNow delivers perishable items with two to four hours

Amazon also has another service called Kirana Now (Amazon Now) for grocery delivery. The company has added personal care and household essentials also as a category to this service. Through KiranaNow, the company has tied up with various Kirana stores as well as grocery retail chains such as Big Bazaar, Spar Market, Hypercity etc, that will deliver the perishable items ordered within two to four hours.  The service was launched in Bengaluru last year and is currently available in Delhi NCR, Mumbai, Bangalore and Hyderabad.

Amazon plans to invest $500 million in online food retailing

The company has applied for permission to invest $500 million into online food retailing. The e-commerce portal has got a nod from the Department of Industry Policy and Promotion to stock and sell local grocery produce online and awaits a final clearance from the Department of Economic Affairs. The company is also doubling its storage capacity and is going to set up 7 new fulfillment centres by the end of this quarter.   

Why is Amazon going for a rapid expansion?

The reason for this rapid expansion in the grocery category could be to tackle competition from Flipkart. Note that there are unconfirmed reports that Flipkart will re-enter the category by July this year. In October 2015, Flipkart had started ‘nearby‘ for grocery supplies, but the company shut it down within four months of launch. However, CEO Kalyan Krishnamurthy announced that it would re-enter the grocery segment. Krishnamurthy said the company was looking at mergers and acquisition to enter the market again.

Competition from established player such as Big Basket

Currently, the space sees tough competition from  Big Basket, an online grocer which has 5 million registered users and a presence in 30 cities across the country. The company has a total funding of  $243 million claims to be growing double digit at 10% month on month, as reported Business Standard.  The company raised its latest round of funding of $150 million in March this year a consortium led by Dubai-based Abraaj Group. The company has also announced it will invest Rs 50 crore in the next 12 months to further expand into the B2B food services. Through which it provides services to Hotels, Catering and Restaurants, the programme is called HoReCa.