Why Amazon Fresh is Betting on Quality and Cashback Offers in the Competitive Quick Commerce Market

Yesterday, Amazon India announced that it is expanding Amazon Fresh, its full-basket grocery service, to more than 130 cities. 

Amazon Fresh provides a wide range of items, including fruits, vegetables, chilled products, beauty, baby, personal care, and pet products. Speaking to businessLine, Srikant Sree Ram, Director of Amazon Fresh, said that 50 percent of the company’s customers come from Tier 2 and Tier 3 cities. 

Thus, the company has expanded to cities including Ambala, Aurangabad, Hoshiarpur, Dharwad, Una, and Suri. Since it started in India, Amazon Fresh has been trying to increase its capacity and expanding to respective cities. 

What is Amazon Fresh?

In 2021, Amazon unified its grocery stores, Fresh and Pantry, and thus Amazon Fresh was born. A wide selection of products, fast and convenient delivery, and unbeatable savings were the prime promises made by Amazon Fresh. 

While speaking about Amazon Fresh, Amazon India Director, Category Management, Siddharth Nambiar, said in 2021, “Apart from offering great savings, Amazon Fresh will also reduce barriers to grocery shopping online.” 

Read: Amazon's Manesar Warehouse Under NHRC Probe for Alleged Labor Rights Abuse

Interestingly, unlike other quick commerce platforms, Amazon Fresh’s delivery time is longer—two hours. Further, it is subject to the availability of a delivery slot.

Both for Prime and non-Prime customers, the minimum order value is Rs 249. However, prime consumers have certain benefits, such as free delivery for Rs 249, while it costs Rs 499 for non-prime members. 

Similarly, Prime members have a rush delivery fee option where items can be delivered within 30-90 minutes for Rs 29. This option does not exist for non-prime customers. 

If we look at other quick commerce platforms in the context of delivery charges, Blinkit's Morning Store service provides free delivery on orders over Rs 100 in select locations, including Mumbai, Gurugram, Bengaluru, Kolkata, and Noida. For Instamart, free delivery is available on orders of at least Rs 199. Big Basket, on the other hand, charges no fee for orders above Rs 99 for its quicker delivery’ section. 

Good quality and cashbacks

The pillar of Amazon Fresh is fresh quality. Highlighting the importance that Amazon Fresh sellers give to quality checks, the company website says that they follow four steps: checking all fresh produce at the receiving counter, doing a thorough inspection of the packing and loading process, making daily overnight checks during storage, and doing a final check before dispatching. 

Speaking about the company’s focus on quality, Srikant Sree Ram, Director, Amazon Fresh India, said recently, “Our expansion and focus on quality products demonstrate our commitment to serve customers and offer them the best online shopping experience for fresh produce and daily essentials.” 

Additionally, Ram adds that customers can also take advantage of bank discounts, incentives, and cashback, which enhances the value of each transaction they make. 

The recent advertisement about Amazon Fresh by actor Manoj Bajpayee delves into how Amazon Fresh gives up to 45 per cent discounts for its items along with cashbacks. The ad further highlights how ordering groceries on other platforms to save time leads to hardly any discount being available for the customer. 

Read: Amazon Fresh Expands to More than 130 Cities in India

Speaking about the concept of slot delivery instead of quick commerce delivery, Ram told the New Indian Express that, as per research, quality products and some convenience in the time slot of delivery are the preferences of consumers. He highlighted the pan-India study by community platform Local Circles, which says that more than 50 percent of consumers prefer a delivery slot depending on their convenience, and they pre-plan the purchase of groceries online. 

Quick Commerce Market in India

According to a Redseer report, India's quick commerce sector has been expanding at a rate of 77 percent year over year to reach $2.8 billion in GMV (gross merchandise value) in 2023. 

With around 46 percent market share, Blinkit leads the quick commerce race. It is followed by Instamart with a 27 percent market share and Zepto with a 21 percent market share, as per brokerage firm JM Financial. 

Several other players have also been eyeing this segment. Reliance Retail’s JioMart and Flipkart are some of the companies that are eyeing the quick commerce segment. Amidst the intense competition, it remains to be seen how Amazon Fresh will fare.