Shares of Instacart, Inc. (Maplebear Inc.) tumbled 7.81% in pre-market trading on Wednesday, following news that e-commerce giant Amazon is expanding its same-day grocery delivery service to include perishable foods. This move by Amazon is seen as a direct challenge to Instacart's business model, potentially threatening its market share in the competitive online grocery delivery space.
Amazon announced that Prime subscribers in over 1,000 U.S. cities can now receive perishable items such as strawberries, milk, meats, and frozen dinners on the same day they order them. The company plans to expand this service to 2,300 cities by the end of the year, significantly increasing its reach in the grocery delivery market. This expansion is part of Amazon's broader $4 billion investment to bring same-day and next-day delivery services to more than 4,000 rural U.S. communities.
The market's negative reaction to Instacart's stock reflects growing concerns about increased competition in the online grocery delivery sector. With Amazon's vast resources and existing Prime subscriber base, the company's enhanced grocery delivery capabilities could pose a significant threat to specialized platforms like Instacart. Investors will be closely watching how Instacart responds to this new competitive pressure and whether it can maintain its market position in the face of Amazon's aggressive expansion.
