Amazon India said on Monday it has received the government’s approval to invest $500 million in the country’s online food retailing market. The e-commerce player’s application to invest $500 million in retailing food products in India had been awaiting a clearance from the Department of Industrial Policy and Promotion (DIPP). The company had applied for permission to operate both in the online and offline spaces.
The ability to sell food products online will give Amazon an edge over its e-retailing rivals in a market to which it has committed $5 billion. India’s grocery market is estimated at an annual $310 billion (Rs 20 lakh crore) of which organised retailers — online and offline — together access barely 5 per cent. The opportunity for organised grocery retailers is pegged at around $62 billion (Rs 4 lakh crore). The grocery market accounts for around 48 per cent of India’s total retail consumption.
In 2015, Amazon had launched an online service — Kirana Now — aimed at delivering goods in a very short time using its own logistics, staff from neighbourhood stores or any of its logistics partners. The company had said at the time it wanted to enable customers to buy anything and everything online, anytime and anywhere at low prices.
Following the approval received for food retailing Amazon is expected to up a wholly-owned subsidiary in India to stock food products and sell online, sources explained.