Google will now deliver fresh food, competing with Amazon
This year, Google Express will add fresh fruit and vegetables to its online grocery delivery platform in select U.S. cities, in a bid to get you to buy more through its site.
The biggest tech companies – Google, Amazon, Uber – aren’t just fighting to take over your mobile phone. They want to deliver your fruits and vegetables.
Google will start testing a delivery service for fresh groceries in two U.S. cities later this year, set to compete with e-retailer Amazon, and startups like Instacart.
According to Brian Elliott, general manager of Google Express, who spoke to Bloomberg, the trial will begin in San Francisco and one other as-yet-unnamed city in the US.
Whole Foods Market Inc. and Costco will be among Google’s partners for the new service, while the company already offers delivery services of non-perishable groceries in Manhattan and Chicago with supermarket Walgreen and others.
The move means Google is now directly competing with Amazon, which launched its Amazon Fresh grocery and fresh food delivery network in the U.S. in 2006. In July, Amazon was rumored to be trialing drive-through grocery stores in Silicon Valley and a restaurant delivery service, similar to Deliver in the UK, in Seattle. These additions signify a big push into food delivery from the retailer, which offers the cheapest grocery delivery service compared to rivals in New York City, according to an April study by Nomura Securities.
Google had clearly set its sights on Amazon for a while. In October last year, Google chairman Eric Schmidt made a telling remark at an event in Berlin. “Many people think our main competition is Bing or Yahoo. But, really, our biggest search competitor is Amazon,” he said. “People don’t think of Amazon as search, but if you are looking for something to buy, you are more often than not looking for it on Amazon.” To compete on Amazon’s home turf, this new effort by Google is likely a way to get more people to buy more things through its own site.
Although Google is currently only starting a limited service in the US, this is a ripe market for disruption. According to research analysts IDG, the online grocery shopping market will more than double in value to £17 billion by 2019 in the UK alone. In the US, it is already a $10.9 billion (£7 billion) industry, expected to grow 9.6 percent annually through 2019, according to a December report by IbisWorld.
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