E-commerce gain Amazon is all set to speed up its quick commerce delivery service that is codenamed Tez by December this year or early next year.
While initially the e-commerce platform’s focus was to roll out the service in the first quarter of January, it was later accelerated. This is as per an Economic Times report. It should be noted that for now, Tez is just a working title for the firm.
Amazon’s entry into the quick commerce space is coming at a time when the quick commerce space has been booming in India. Several key players who entered the space include Reliance Retail, Flipkart, and others. Some of the prominent players already present in the segment include Zepto, Blinkit, and Instagram. Quick commerce platform Zepto recently raised $300 million in its fundraise recently. This was the company’s third fundraise in the last six months. The last funding round that happened in November was reportedly led by Motilal Oswal’s private wealth division, along with participation from HNIS and family offices.
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Additionally, recently, the shareholders of food delivery platform Zomato raised Rs 8,500 crore via qualified institutional placement (QIP). In simple terms, a company generates funds through a QIP by selling shares or other securities to qualified institutional buyers (QIBs).
Highlighting the QIP raise, the company earlier said in a statement, “While the business is now generating cash (vis-à-vis a loss-making business at the time of the IPO), we believe that we need to enhance our cash balance given the competitive landscape and the much larger scale of our business today," Zomato CEO Deepinder Goyal reportedly said in October.
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Amazon, on its part, is gearing up with several internal and external stakeholders with regards to its quick commerce plans, adds the report. The company is also hiring freshmen for the same.
Amazon is adopting similar strategies to other quick commerce platforms by establishing dark stores and working out the specifics of stock-keeping units (SKUs), a source told the Economic Times. Additionally, the company is concentrating on various categories and building its logistics infrastructure.
Traders Body Raises Concerns Over Quick Commerce Platforms
With quick commerce increasing rapidly, there are objections raised about the same as well. The All India Consumer Products Distributors Federation (AICPDF), a body that represents FMCG distributors, has written to Finance Minister Nirmala Sitharaman and urged concern regarding operation and fund utilization by these quick commerce platforms.
Regarding Zepto’s fundraising, the company highlighted that the “massive fund along with similar capital accumulations by quick commerce platforms are predominantly utilized for predatory pricing and steep discounting.” The body has highlighted that these practices, in turn, have an impact on traditional retail stores. Further, they have urged the government to halt any further investment on these platforms until the Competition Commission of India (CCI) concludes an investigation on these platforms with regards to FDI complaints.
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