Google Inc. (NASDAQ:GOOGL) , has just announced its plans to enter the fresh food market. The search engine giant intends to start delivering fresh groceries in two cities later this year. This venture should place the company in more direct competition with Amazon’s own groceries component, AmazonFresh (NASDAQ:AMZN).
Powered by Google Express, the new venture will also setup more traffic for Google’s websites. Express already delivers large quantities of merchandise to consumers. Bearing this in mind, expanding into fresh food deliveries was perhaps inevitable.
“For a lot of our merchants that have been successful with this, we’re not representing the whole store today. It’s our incentive, as well as the merchant’s incentive, for us to help customers get the full store delivered to them,” said Google Express’s GM Brian Elliot.
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Google Steps Up its Race with Amazon
Amazon went forward with its fresh deliveries some time ago. On Tuesday the online company announced that it will begin delivering goods to restaurants. Reports showed that the e-commerce giant provides the lowest costs in large cities like New York. Their Prime Now app now lets users price food orders from a number diners in the Seattle area. This will raise the business of Amazon Restaurants. The firm does not charge any fees to the customer for this service. Reuters reports there to be around 40 million Prime members globally.
Google (NASDAQ:GOOG) claims that delivering fresh foods will help them grow from warehouse stock deliveries, which come with their own set of problem. The more options Google can give to its customers, the more income they are likely to gain, reports Elliot.
Amazon’s move into the restaurant deliveries is a risky one. The meal deliveries industry is renowned for it small leniencies.
Google Grows its Thriving Business
In the Midwest, the Google is growing its next-day deliveries service. Places like Ohio, Indiana and Wisconsin hold over 25 million potential buyers. Through companies like Kohl’s Corp and Walgreens, Google already serves customers in Chicago and Manhattan.
Google (NASDAQ:GOOGL) will begin delivering fresh foods in San Francisco and one other city. The venture will see them partner with entities such as Costco Wholesale and Whole Foods Market. IbisWorld claims the online groceries market is a $10.9 billion dollar industry in the US. It holds a projected 9.6 percent annual growth until 2019.