Amazon.com, Inc. (NASDAQ:AMZN) has just become more threatening to local retailers and startup companies, Alan Patricof told Betty Liu on Bloomberg’s In The Loop.
The Greycroft Partners managing director was talking about the effects of the new Amazon.com, Inc. (NASDAQ:AMZN) Prime Now one-hour delivery service.
“I think it affects a lot of local retailers who, I’m sure, feel threatened by this. And that’s what sustains our neighborhoods, the local supplier,” he said.
Amazon.com, Inc. (NASDAQ:AMZN), on Thursday, announced Prime Now, with a limited launch in Manhattan, New York. With the service, Prime members can enjoy two-hour delivery of ordered items for free and can opt to pay $7.99 for one-hour delivery.
According to Amazon.com, Inc. (NASDAQ:AMZN), the biggest online store in the United States, Prime Now is expected to be launched in more cities in America by next year.
Meanwhile, Patricof also said that some startups like the ones his firm invests in will also feel the pressure from the new service announced by the online commerce giant. However, he did say that their portfolio of startups fortunately does not have a company that will be directly hit by this new one-hour delivery service.
Furthermore, he noted that one-hour delivery, in his opinion, will not be necessary for most people. He asked how much merchandize does one need to buy every day that they need the products in their hands in an hour. In an earlier point of the interview, he said that he thinks this new fast delivery service is a gimmick because it is likely to be expensive to operate.
Nevertheless, he said that the online commerce space is very hot at the moment. He did note, however, that companies his firm has invested in find that it is useful to have some local presence.
Christopher Lord’s Criterion Capital reported owning 269,008 Amazon.com, Inc. (NASDAQ:AMZN) shares, worth about $86.74 million, by the end of the September quarter.