Amazon is leading a new investment round of 575 million dollars, which is equal to 513.4 million euros. This news has been announced by online food delivery service Deliveroo, which Amazon has a stake in.

Along the side of current investors, such as Greenoaks and T. Rowe Price, Amazon appears to be gaining a significant share of the business. This as part of a promotion where the total value of Deliveroo is close to 1.53 billion dollars. According to Deliveroo, the funding will be invested in the improvement of the platform, in order to offer more work and reach new customers for partnering restaurants.

To execute these plans, Deliveroo wants to grow its engineering team, expand their reach and support new propositions. One of these new propositions is called ‘editions’, which are delivery-only super kitchens. The company promised to deliver more tools to make their riders’ work more flexible and well-paid as well.

The founder and CEO of Deliveroo says: “Amazon has been an inspiration to me personally and to the company. We look forward to working with such a customer-obsessed organisation. This is great news for the tech and restaurant sectors. It will help to create jobs in all of the countries in which we operate."

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In 2018, food and beverage, e-commerce grocery, sales reached 4.75 billion US dollars on Amazon. It is the fastest growing segment for online retailers. According to Edge by Ascential, the most popular category within food/beverages, with a total sales of 140 million dollars, was ‘coffee’.

Jacob Porter, director of global marketing of Edge by Escential said: “Since the very beginning, coffee has been at the top of Amazon’s food chain. Not only does it sell much more than any other single product type in the grocery group, but it continues to grow by 40%-plus annually.”

It is expected that the online selling of groceries will reach 100 billion dollars by 2025. Amazon will maintain its position as market leader, and coffee is going to continue being a significant subcategory in this growth.

E-commerce grocery: coffee

The top three coffee-sellers on Amazon are Starbucks ($16.8 million), Keurig Dr. Pepper ($12.6 million) and Nestlé ($11.2 million). To join the game, Amazon has created a private label of coffee pads, “Solimo”. The label rose quickly after the launch, with approximately $60,000 in sales per week.

Youngevity International, a company trying to become a leader in online coffee retail, announced that its brand ‘CLR Roasters’ will start selling Café La Rica espresso and Josie’s Java House coffee. Amazon will handle the logistics, order fulfilment and customer support for this new company. The company is expecting to sell over 41 million pounds of coffee every year. This would generate an approximate revenue of 250 million dollars from 2019-2023.

Not only major players, but small businesses are profiting from the successful environment as well. Consumers frequently visit Amazon in order to discover new coffee brands with different roasting techniques, tasting notes and sourcing methods.

Amazon is the primary destination for coffee-related searches, according to OneSpace’s search data. These searches accounted for more than 60% of the search volume across top retailers. For example, in 2017, Death Wish Coffee generated 50% of its sales via Amazon.

Consumer spending (online as well as offline) made a significant jump due to the newly emerging idea of premium coffee being available everywhere. According to Michael Schaefer, Euromonitor global lead, food & beverage, most important product ideas and major trends come from coffee shops. By upselling (via online retailers such as Amazon) and online subscription services, coffee shops are establishing brand loyalty.

Schaefer said: “Successful coffee players will combine discovery, experience, long-term purchasing and rapid product innovation, all across a wide range of distribution points.”

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The Indian department includes the Amazon Now and Amazon Pantry services. Both are responsible for the grocery, household and other food products’ sales in India. A company’s representative talked to the Economic Times: “Our food retail business currently serves customers in 100+ cities across India. We are on track to scale the business further by adding more selection and expanding reach to serve customers in more pin codes.”

FDI e-commerce guidelines

Earlier this year in January, reports showed that the marketplace platform would stop the sale of food products. This in order to comply with the new FDI e-commerce guidelines in India. The new guidelines prohibited online marketplaces from making more than 25% of purchases of a vendor. However, it was clarified by the government that companies with FDI in food retail were not included in the guidelines. This meant they could retail through e-commerce. The platform resumed their grocery services operations after this brief pause.

The grocery services of Amazon are a major plan in the Indian food retail for the platform. The company committed 500 million dollars to the Indian market. The head of Amazon India, Amit Agarwal, said groceries and household products are expected to account for over half of its business in India in the upcoming five years. A research report by Citi said that Amazon India is expected to reach 70 billion dollars in GMV (gross merchandise volume). That would account for a net sales of 11 billion dollars by 2027. The Indian e-commerce market is currently at a value of 200 billion dollars. It is predicted to increase to 1.2 trillion by 2021.

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eBay and the 100-year old Coles Supermarket chain in Australia extend their partnership to launch the first full-blown online grocery business, reports Tamebay. The marketplace platform hopes to attract more online shoppers from Melbourne, Brisbane and Sydney to purchase on eBay.

eBay users from Australia can now shop (non-)perishable everyday products such as fresh food, personal care or household items. Free delivery is provided for shoppers who spend more than $49 and are subscribed to the ‘eBay Plus’ membership programme. They also receive double the amount of flybuys points on every order.

Next to eBay’s range of unique and new items from all other categories, the partnership provides access to Coles’ products. Coles’ is now following 40,000 other Australian retailers that use eBay, such as Target, The Good Guys and Myer.

Online grocery shopping

Only 3% of Australian shoppers currently shop for their groceries online. Coles and eBay are therefore breaking ground in the business for online groceries in Australia. They might be just in time before Amazon starts gaining domination in this market. Coles will provide an unattended delivery option, to enable their customers to receive orders while they are away from home. Other delivery options are released throughout the upcoming year. Alister Jorden, Chief Executive of Cole’s says: “We always look for ways to make life easier for our customers. “By partnering with eBay, we provide our customers with another convenient way to access our products and have them delivered straight to their door.”

As Coles launched their online shop two weeks ago, their feedback reveals that shoppers do not accept broken promises. Negative feedback can be received for every single product that is ordered. The feedback is therefore not the same as for other sellers and could be seen as unfair, as one buyer could leave 18 negative reactions for a single transaction.

It is no surprise that eBay chooses to launch the online grocery market in Australia. Amazon landed in Australia about a year ago, and in order to compete, it needs to step up its game instead of being a general marketplace.

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The collaboration between Rakuten and Walmart includes the launch of a new online grocery delivery service in Japan beginning in Q3 of 2018. Rakuten and Seiyu GK, a subsidiary of Walmart, have reached a basic agreement to establish a joint venture with the aim of launching a new online grocery delivery service in Japan, to be known as “Rakuten Seiyu Netsuper.” The new service is planned to be launched in the latter half of 2018. Rakuten Seiyu Netsuper will aim to increase fulfillment capacity, enrich the merchandise offering and improve convenience for the customer. The service will aim to increase capacity in 2018 with the establishment of a dedicated fulfillment center, in addition to offering deliveries from Seiyu stores. The service will include not only fresh produce and daily consumables but also a rich lineup of convenient items such as cut vegetables, partially-prepared foods, and ready-meal kits, as well as popular local gourmet products from merchants on the Rakuten Ichiba marketplace.

Additionally, the eBooks and audiobooks service will be formed with an exclusive alliance between the two companies enabling Walmart to begin selling eBooks and audiobooks as well as offer Rakuten Kobo eReaders in Walmart stores and online in the United States. This project will start later this year. All eBook content will be accessible through a Walmart/Kobo co-branded app available on all iOS and Android devices, a desktop app and Kobo e-Readers, which will also be sold at Walmart later this year.

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