Amazon Retail India is also a vendor on Amazon’s Pantry and Prime Now grocery offerings. It received the final nod from the Indian government in July 2017 to invest $500 Mn in India’s food retail space.
After facing certain delays due to government norms, in February, Amazon Retail started with its pilot services in Pune. It will now sell locally made and packaged food to the consumers directly and is looking to completely roll out its food retailing business in the country within a quarter.
The report has surfaced around a time when Walmart has reportedly backtracked from its plans of food retail in India, after acquiring Flipkart for $16 Bn.
Walmart now plans to rather have a presence in the food products market through third-party retailers on Flipkart, which in turn would enable it to escape the scrutiny and riders associated with the foreign direct investment of up to 100% in food-only retailing ventures.
This opens up a less crowded segment so far for Amazon Retail to create its dominance, in comparison to the e-commerce and hyperlocal grocery sector where players like Flipkart and Paytm Mall are aiming to gain the top spot. But still, Amazon Retail will have to face the heat from existing players like Grofers, Bigbasket, Supr Daily, amongst others in this segment.
The reports also surfaced recently that Biyani’s Future Group is aiming to enter the milk and dairy products delivery segment, and once the model is in place, other verticals such as fruits, vegetables, and groceries will be added.
Future Group also plans to increase its network of Easyday outlets to 10K by 2022 from the present 950 stores and is in talks with various logistics firms for last-mile delivery of daily essentials.
So far, Amazon has given impetus on creating a solid network of last mile delivery to create an edge for itself. Earlier this year, it opened 15 fulfillment centers to create a specialised network for its hyperlocal grocery delivery business on Amazon Now.
With the latest addition, Amazon now has 56 fulfillment centers across 13 states with a storage space of 13.5 Mn cubic feet. Of this, Amazon Now will have 120K cubic feet of space.
With Flipkart also piloting its grocery delivery app in Bengaluru, and Walmart looking to drive its food retail plans over Flipkart, it’s certainly a tough road ahead of Amazon.