Can Amazon deliver groceries too?June 5, 2013: 1:55 PM ET
Amazon may have started out as an online bookseller but the Seattle-based company has quickly evolved into the world's largest online retailer. And now Amazon is looking to take over the online grocery business.
According to a Reuters report, Amazon is "planning a major roll-out of an online grocery business that it has been quietly developing for years."
Amazon (AMZN) has been experimenting with grocery delivery service AmazonFresh in the Seattle area for more than five years, and could expand it to Los Angeles as early as this week and San Francisco later this year, according to Reuters. If those launches go well, AmazonFresh could begin in 20 other urban areas in 2014, both in the United States and internationally.
The potential expansion plan became a hot topic among traders on StockTwits.
Amazon may be king of e-commerce, but delivering groceries could prove to be a tougher business to penetrate since profit margins on food are low. But Reuters pointed out that Amazon could compensate by delivering high-margin products like electronics at the same time.
Amazon rival Wal-Mart (WMT) has been testing its fresh grocery delivery service, Walmart To Go, in the San Francisco Bay area for more than two years.
Amazon was also drawing attention for making its debut in India Wednesday. The company is beginning by selling books, movies and TV show video products, and will begin including mobile phones and cameras in the coming weeks.
The new agreement will bring hundreds of TV shows to its Prime instant video service, including children's programming like Dora the Explorer, SpongeBob SquarePants and Blue's Clues, as well as MTV and Comedy Central hits like Awkward and Tosh.o.
Netflix (NFLX) allowed its deal with Viacom to expire last month.