Becomes first foreign venture in the sector, starts pilot in Pune
Amazon has claimed the status of becoming the first foreign company to start with the food retail venture in India. It will now be available on Amazon India platform as Amazon Retail Pvt Ltd and will soon start with its pilot services in Pune. Beating the global rival Walmart, Amazon will sell locally made and packaged food to the consumers. It will be competing with other leading online grocery and food retail market places like Bigbasket, Grofers and SuprDaily. They have received similar approvals from the government for the purpose of food retailing.
This development has come at a time when Walmart is already looking to acquire 40% stake in the Indian e-commerce company Flipkart, thus identifying similar possibilities to enter the Indian market. It will take about a quarter for the company to roll out its food retailing business in the country.
Amazon received the final nod from the government of India in July 2017 to invest $500 million in India’s food retail space. There were reports that Amazon is planning to roll out the food retail venture around October 2017. The same was delayed since the company was said to be striving to keep the venture separate from the online market place.
Amazon has launched Amazon Now which is an app for food and grocery items home delivery in order to meet the demands. The app is a meeting point between the consumers and Big Bazaar and is intended for customers who want their products delivered within a few hours. Currently, Amazon’s warehouses in the country do not store food items in order to meet the Amazon Now demand.
By entering the food retail market, Amazon will now directly reach the Indian consumer. The food retail venture can be a milestone for the online marketplace in India as companies like Alibaba and Walmart are aggressively trying to eat the major share in Indian food and grocery vertical.
Amazon has doubled the war chest to $4.74 billion, very close to its initial $5 billion commitment in India. Speculations are there that Future Group is eyeing an alliance with the global e-commerce company to bolster its presence in the country’s organized food market. This is the right time for Amazon to move towards holding a leadership position in the retail market as well.