Amazon Becomes First Foreign Venture To Foray Into Indian Food Retail, Starts Pilot In Pune

Beating its global rival Walmart, Amazon has finally claimed the status of becoming the first foreign company to start with its food retail venture in India. Reportedly, it will now be available on Amazon India platform as Amazon Retail Pvt. Ltd. and will start with its pilot services in Pune.

It will now sell locally made and packaged food to the consumers directly, and will compete with other leading online grocery and food retail marketplaces like Grofers, Bigbasket, Supr Daily, who received similar approvals from the government for food retailing.

To be noted, the development has come at a time when Walmart is looking to acquire a 40% stake in Indian ecommerce major Flipkart, thereby identifying similar possibilities to enter the Indian market.

As stated by an Amazon spokesperson to ET, it will take around a quarter for the company to completely roll out its food retailing business in the country.

An email sent to Amazon did not elicit any response till the time of publication.

The ecommerce giant received the final nod from the Indian government in July 2017 to invest $500 Mn in India’s food retail space. Initially, the reports surfaced that Amazon is planning to roll out its food retail venture around October 2017. But it was delayed as the company was said to be striving to keep this venture separate from its online marketplace, as mandated by the Indian government.

Amazon has already launched Amazon Now, an app for food and grocery items home delivery to meet the immediate demands. The app, however, is simply a meeting point between the customers and Food Bazaar/Big Bazaar and is intended for customers who want their grocery items delivered within few hours. Currently, Amazon’s warehouses in India do not store food items to meet the Amazon Now demand.

With the entry into the food retail, the company will now directly reach the Indian consumer.

The food retail venture can prove to be a milestone for online marketplace in India as the powerful global forces such as Alibaba (recently acquired BigBasket), Walmart are aggressively trying to now eat the major share in Indian food and grocery vertical.

Amazon has already doubled its war chest to $4.74 Bn, reaching close to its $5 Bn commitment in India. Also, speculations are there that retail giant Future Group is eyeing a strategic alliance with the global ecommerce company to bolster its presence in the country’s organised food and grocery market. Thus, time is ripe for Amazon to hit the nail hard and push itself towards holding a leadership position in Indian food retail market as well.