E-commerce giant Amazon has received government approval to retail food products in India, which would now allow it to expand its business to compete with local rival Flipkart.
Amazon was earlier reported to be keen on investing $500 million (SR1.87 billion) in the food segment, aside from the $5 billion it had already committed for its operations in India.
Seattle-based Amazon currently acts as an intermediary for the online sale of food products in India via Amazon Pantry, where independent retailers including joint venture Cloudtail sell various products. It also offers same-day grocery delivery on its Amazon Now app through a tie-up with Indian retailers Big Bazaar, Star Bazaar and Hypercity.
The government’s approval offers Amazon an incentive to sell its own private-label food products, and potentially give it an edge over Flipkart, which has been India’s leading e-commerce player except for the grocery segment.
Flipkart is planning to launch its own private brand in the grocery segment after an earlier attempt, through an app called Nearby, failed to catch on to customers and was shut down in February last year.
India is the third world’s largest grocery market with $428 billion worth of sales, but the subcontinent’s online grocery segment makes up only one percent – or about $150 million – of the total global turnover.
Amazon wants to tap India’s rapid shift to online and mobile shopping, which is estimated to grow to $47 billion in 2020 from only $10 billion in 2015.
The web giant on June 16 announced its acquisition of Whole Foods for $13.7 billion – the largest in Amazon’s 22-year history so far, dwarfing its $1.2 billion purchase of online footwear retailer Zappos in 2009.
Amazon receives India’s approval to sell food products
Amazon receives India’s approval to sell food products
