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Google Expands Online Delivery Service To 13 States; Should Amazon Worry? (AMZN)

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Google, a subsidiary of Alphabet Inc (NASDAQ:GOOGL), said that it is expanding its home delivery shopping service, Google Express, to more than a dozen eastern states, Tech Crunch reported. The delivery service, available across a large part of the East Coast, allows online shoppers to order consumer products like electronics, clothing, health and beauty items, and dry good groceries, from a variety of retailers.

Google Express Expanded To 13 States

According to the report, Google has expanded the service to the following states: Delaware, Maryland, New Jersey, New York, Pennsylvania, Virginia, West Virginia, Connecticut, Massachusetts, Maine, New Hampshire, Rhode Island and Vermont.

Google Inc (GOOGL) Grocery Delivery

The search engine giant expects that the expansion will provide coverage to roughly 70 million more people in eastern states.

Shoppers can orders products from retailers, including Costco, Kohl’s, L’Occitane, PetSmart, and others. In metro areas, shoppers can place orders for same-day delivery. And in suburban and rural regions, delivery time will be next-day or two-day delivery.

Google Enters Direct Competition with Amazon

Brian Elliott, general manager of Google Express, told Business Insider that the company is planning to expand the online delivery service to the entire country from roughly 20 states and regions by the end of the year.

Google Express looks a direct competitor to Amazon’s Prime service. The company’s Prime Now service offers same-day delivery in major cities across the U.S., while its Prime membership program offers two-day delivery on millions of items.

To expand across the country, the search engine company killed its grocery business and stop selling fresh fruit and vegetables.

“We’ve been testing a lot of different things, figuring what works, and how it works,” Elliott says. “And now we’re really, dramatically scaling the business.”

Google started its Express delivery service in 2013 because more and more people were moving to Amazon for product search.

A survey, involving 1,000 U.S. consumers, showed Amazon is the preferred starting point for product search. The survey found that 38% of shoppers start with Amazon and 35% start with Google. The survey, conducted by PowerReviews, also found that most shoppers ultimately purchased their desired products in physical retail stores.

Shoppers choose Amazon as starting point for product search due to variety of products, free shipping, and better deals, according to the survey. Additionally, more than half of shoppers who started their shopping journey on Amazon cited the presence of a large volume of reviews as a key factor. Almost all of shoppers read reviews on Amazon before making to a decision to buy products.

The search engine giant said that its Express service will offer a combination of same-day, overnight, and two-day delivery options. Users can either pay a $4.99 minimum delivery fee for each store order, or a yearly $95 membership fee that eliminates the per-store fee. Shoppers can also test the service through a $10-a-month plan.

The company is also working to add more retailers to the program. The Business Insider report suggest that if the Alphabet Inc (NASDAQ:GOOGL) subsidiary rolls out a free way to feature Express merchants on product search pages, more retailers will likely want to join the program.

The company did not disclose information about the service’s subscribers and revenue.

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