Amazon will strengthen its presence in a booming market that arouses much envy. On Tuesday, the British Competition Authority - the Competition and Markets Authority, or CMA - gave the green light for the American giant to take a 16% stake in the capital of one of the world leaders in meal delivery at home, the British Deliveroo.
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Last December, the CMA concluded, after a first investigation, that there was a "very real prospect " that Amazon's entry into Deliveroo's capital could harm competition, for example by pushing the American group to avoid further developing its grocery delivery business via its platform or by discouraging it from launching its own meal delivery service. The authority had therefore decided to launch a second so-called “ phase 2 ” investigation in order to verify the problems raised by this equity investment.
During this second part, Deliveroo however warned against the consequences of a refusal by the authority, warning that it did not have enough capital to hold it financially over time. Without the support of Amazon, the company would therefore be in an untenable situation: the coronavirus had " a serious impact on the activity of Deliveroo ", specifies the Authority, which had then provisionally given its agreement on this basis.
Since then, the financial situation of the British platform has improved, becoming " much better than expected " thanks to the recovery in activity in the United Kingdom. The CMA this time confirmed its agreement, explaining that " this level of investment (of 16%) would not significantly reduce competition in either market ", both for the delivery of meals and that of delivering everyday consumer products. In addition, the arrival of Amazon should not pose a risk to consumers either.
The Authority specifies, however, that it remains attentive to market developments and that any increased participation by Amazon would again prompt an in-depth investigation.
A particularly interesting market for Amazon
The arrival of Amazon at Deliveroo is not trivial: the United Kingdom is the third market of the American giant in terms of net sales, and the country represents the first market for the meal delivery platform and the first European market. in this sector. “ The UK is an important and attractive market for Amazon due to the high levels of Prime membership ,” and the group led by Jeff Bezos shows “ continued global interest in delivering food to online restaurants, ” emphasizes the Authority in its conclusions.
" This is fantastic news for our UK customers and restaurants, for the UK economy, " said the UK company on the announcement of the CMA's decision. Deliveroo says it is " very happy that Amazon, the most innovative and customer-oriented company in the world, underlines with this investment choice the confidence it places in Deliveroo and in its growth prospects ". The money obtained during the acquisition of a stake will make it possible to finance three priorities, specifies the company: " to provide hyper-personalized service to its customers ", to develop its " pioneering concept of kitchens operating exclusively in deliveries " and to build " new technological tools to help restaurants adapt and succeed in this time of unprecedented change ”.
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Meal delivery remains a booming market, which is experiencing wide movements. Last month, the other giant in the industry, Uber, bought the Postmates app for $ 2.65 billion. This transaction aims to offset the collapse of its VTC activity, by capitalizing on its Eats service. In Europe, too, Just Eat recently acquired Takeaway, before also taking over Grubhub.
Amazon, for its part, had already tried to break into the meal delivery market, by launching Amazon Restaurants in 2015. Available in several American cities, this service had failed to establish itself in the United Kingdom, and the titan of e-commerce had finally stopped its service in 2019. Very competitive, the market had overcome the efforts of the group.
