Tag: NASDAQ: AMZN (Amazon)

Categories
Stocks

Amazon takes stake in Grubhub

Amazon on Wednesday agreed to take a stake in Grubhub as part of a deal that will also give members of its Prime subscription program a one-year membership to the food delivery service.

The partnership gives Amazon the option to take a 2% stake in Grubhub, the U.S. subsidiary of Just Eat Takeaway.com, the European food giant said. Amazon will be able to increase its total stake to 15% of Grubhub depending on certain performance factors, such as the number of new customers added.

News of the deal sent shares of delivery platforms lower. Uber’s stock fell more than 3%, and shares of DoorDash plunged as much as 9%.

The agreement comes as Netherlands-based Just Eat is exploring a sale of Grubhub amid pressure from investors to improve its business. Just Eat’s stock is down more than 60% this year.

Amazon had previously experimented with adding food delivery perks to Prime. In September, it announced a tie-up with European delivery company Deliveroo that gave Prime members in the U.K. and Ireland access to Deliveroo Plus for one year. Amazon took a stake in Deliveroo in 2019.

Source: CNBC

This is a powerful collaboration. DoorDash is probably watching this closely.

Categories
Technology

France protects book industry from Amazon

As much as I like bookstores, this feels to me like too much protectionism.

Sophie Fornairon’s independent bookshop has survived the rise of Amazon thanks to a French law that prohibits price discounting on new books, but she says the e-commerce giant’s ability to undercut on shipping still skews the market against stores like hers.

Fornairon, who owns the Canal Bookstore in central Paris, now hopes that new legislation that would set a minimum price for book deliveries will even the contest further in the battle of neighbourhood stores against Amazon (AMZN.O).

French law prohibits free book deliveries but Amazon has circumvented this by charging a single centime (cent). Local book stores typically charge about 5-7 euros ($5.82-8.15) for shipping a book.

Amazon had lobbied hard against the legislation, worried the French move might set a precedent, the senator said.

Reuters

Amazon has used its scale to get ahead of independent bookstores in France. This is seen as unfair to the bookstores in France however Amazon also made a good argument that they advanced consumer welfare by having lower prices and convenience.