It looks like Amazon has big plans for entering the offline retail store business. A New York Times report has revealed the company has plans to open up electronics stores in the US, around products like fridges, television sets, etc where people might not always be willing to buy products online.
This shouldn’t come as a surprise. Amazon has already launched a book store in New York. It also has a grocery store in Seattle, where customers can just walk, pick up the products and walk out, thanks to the company’s Amazon Go service.
But the New York Times report also indicates Amazon wants to redesign the retail experience for customers. India appears to be one country where Amazon is also planning to open grocery stores offline, says the report, and the project is codenamed Project Everest.
NYT report adds Amazon’s first grocery store will open in Bengaluru, and it quotes a person familiar with the plans. In a statement to the newspaper, Amazon said they were “excited by the Indian government’s efforts to encourage foreign investment in a ‘stronger food supply chain’.” Amazon has also confirmed it has sought approval from the government to invest in this in India.
It’s not surprising to see Amazon push grocery stores in India, but this model hasn’t really worked in India. Previously apps like PepperTap have had to shut down their businesses around online grocery deliveries in India. Even Grofers, which is one of the more successful brands, had to shut down operations in nine cities in January 2016. Reasons are varied. The margins are thin around grocery business in India, then there’s the fact that local shops are happy to deliver stuff home, even for bare minimum orders and customers are not really loyal to one brand.
For Amazon, the grocery store business in India, won’t be easy to crack. But the company is known to do things differently from other players. Given that China as a market is not an option for the e-commerce giant, it will have to make sure all of its plans in India succeed.