E-commerce giant Amazon eyes Swiggy’s Instamart for quick commerce push in India. This signals Amazon’s growing interest in the fast-growing segment of online grocery delivery in India.
- Amazon has expressed interest in acquiring a stake in Instamart through a pre-IPO placement or a complete buyout.
- This comes as Swiggy gears up for its initial public offering (IPO) with a draft filing submitted to Sebi for ₹10,414 crore.
- According to a source cited in the Economic Times, “Amazon has swooped in with interest” in Instamart.
Challenges in Finalizing the Deal
- The deal faces potential roadblocks due to its complex structure.
- Swiggy may be hesitant to sell only Instamart, while Amazon might not be interested in acquiring Swiggy’s entire food delivery business.
- Acquiring the whole company could be expensive, considering Swiggy’s valuation of $10-12 billion.
- Amazon typically avoids minority stake acquisitions, creating another hurdle.
Amazon’s Rationale for the Acquisition:
- Amazon has been developing its quick commerce service in India for months.
- Acquiring Instamart would provide them with a ready-made solution and an established customer base.
The Trend of Acquisitions in E-commerce
- This potential deal follows Flipkart’s unsuccessful talks with Swiggy last year, likely due to valuation discrepancies.
- Flipkart also explored an acquisition of Zepto, another player in the quick commerce space.
- Experts suggest that established e-commerce companies are looking to acquire quick commerce players to expand their reach and combat competition.
The potential acquisition of Instamart by Amazon highlights the intensifying competition in India’s booming quick commerce market. With growing customer demand for speedy deliveries, this space is expected to witness further significant developments.
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