The prediction that Amazon (AMZN: NASDAQ) would quickly become a modern day business behemoth that perforates almost every sphere of our lives is slowly coming true. The e-commerce giant has now made an entry into the meal kit space, with new 'Amazon Meal Kits' being tested in Seattle.
The scheme is functioning as a limited trial on Amazon's main website, initiated at the end of June. The meal kits appear on the website with individual pictures of all the ingredients, alongside how many servings they entail time needed to prep, items required from the kitchen and instructions, making them extremely easy to use and order. "For select users able to participate in the trial, there are approximately 17 different meals on offer, and they range in price, starting at $14.99 and going up to $18.99."
The way the meal kit service has panned out is characteristic of Amazon's previous diversifications: it first uses a small or restricted market as the guinea pig for its ideas and services and then expands region by region depending on the level of success achieved. This notion has also been reflected in Amazon's grocery services and AmazonFresh.
Of course, if Amazon's Meal Kit service becomes successful, this could hurt companies like Blue Apron (NYSE: APRN). Last week, Blue Apron's stock dropped by 11% to $6.55 to level off at around 35% below its IPO price of $10 a share. This also leads some to believe that Amazon's behavior is becoming increasingly anti-competitive and may need to be stopped by government intervention in the future if it bulldozes other companies at this rate.
It's not a new tactic for Amazon. It began with the very successful Kindle, an idea ripped off from the Sony Reader. Taking a cue from Roku, it also created the Amazon Fire TV and TV Stick. Amazon saw what Netflix was up to and beefed up Amazon Video with original content. The Amazon Echo, meanwhile, went after Siri and Cortana with the Alexa voice assistant. Amazon also did a mobile phone, but they can't all be winners.
At this point, Amazon may be competing for solely the sake of competing. What goes up must come down, and while Amazon may currently be on a winning streak, the feds could easily find a loophole that could allow it to bring the e-commerce giant down, which would render its current efforts meaningless. Thus, though Amazon may be thinking that long term survival is rooted in rapid expansion and diversification, there is something to be said about laying low and improving upon existing markets so as to not be the rabble-rouser in a highly competitive space.
In the meanwhile, people are eager to see Amazon's meal kits be released nationwide, especially in an era that continues to be dominated by the need for flexibility and rapidity in people's busy lives. Perhaps that's why Amazon's stock has been on the rise as investors look forward to this new development.