Google Express to take on Amazon Fresh in grocery delivery space in San Francisco and Los Angeles

Google Express has launched its groceries delivery service in San Francisco and Los Angeles. The search engine will deliver fresh food items including meat, eggs and other perishable goods via its home delivery service, which commenced on 17 February.

Its competitors in the groceries delivery space include Amazon Fresh, Instacart, Fresh Direct and Safeway. However, unlike Amazon and Fresh Direct, who maintain expensive refrigerated warehouses where the produce is stored before a delivery is made, Google has tied up with local grocery stores to provide the service.

In San Francisco, it has tied up with Costco Wholesale, Whole Foods Market and Smart & Final stores; in Los Angeles it will deliver food stuff via Costco, Smart & Final and the high-end Vicente's Supermarket.

The company said that fresh grocery and frozen items will be placed in a cooler until it reaches the customer. It will charge a minimum of $4.99 (£3.49, €4.48) as delivery cost. This charge could go higher depending on the size or availability of the order placed. However, Google Express members, who pay an annual subscription of $95, can avail the service at a discounted delivery cost of $3.

Although customers will have to place a minimum order of $35 for delivery of groceries, the company is providing options such as same-day delivery and two-hour delivery at a higher price. This business is expected to be trickier than Google's core business because of high delivery costs and historically low profit margins of about 2% on grocery sales.

While the Webvan group, which is one of the earliest companies to operate in this space, went defunct after it filed for bankruptcy in 2001, newer companies such as Amazon and others have struggled to earn profits, amid various challenges.