India

Sources: Amazon might enter India’s grocery market later this month

By RJ Whitehead

- Last updated on GMT

Sources: Amazon might enter India’s grocery market later this month

Related tags: Supermarket

US online retail major Amazon could soon break into India’s packaged foods and beverages market to become the first international e-commerce site to enter this category.

According to sources cited by Times of India​, Amazon has already started to accept orders for Coca-Cola Zero, which will begin deliveries next week.

Subsequently, the marketplace will branch out into around 100 other food and beverage products, though it is expected it will widen its stock lines over the coming months, the source, who claimed to have direct knowledge of the move, told the paper.

Fresh food eventually

Amazon launched its India operation earlier this year, and commenced the delivery of fresh food under its AmazonFresh brand in 2007 in the US. An announcement of its approach into Indian food retail is expected to come in mid-October, the source added.

Another anonymous contact went further, telling TOI: “They will get into fresh food eventually in India.” 

Groceries account for 60-70% of India’s retail market, with the segment dominated by mom-and-pop kirana​ stories and larger, conglomerate-owned chains like Big Bazaar that are still struggling to find their place in a highly traditional market.

Indeed, total grocery e-commerce is still only worth a paltry US$2.3bn in India, though analysts expect this to grow significantly as more Indians get connected to the internet, especially through mobile phones. It is also attractive for modern retailers, who are being drowned by high real estate rents in metro cities and struggle to contend with a crumbling communications infrastructure and supply chain.

Online grocers on the rise

Dozens of new grocery sites have appeared over the past few years, including BigBasket, LocalBanya, ZopNow, EkStop, AaramShop, MyGrahak, VeggiBazaar, Fresh N Daily and Farm2Kitchen, with many of these maintaining the kirana model of being highly local, often within single cities—and even limited to a handful of neighbourhoods.

According to retail consultancy Technopak, the online grocery retail market is growing at 25–30% in metros and other large cities. 

Urban India’s increasing shortage of time is fuelling the growth of online grocery​,” said Pragya Singh, Technopak’s associate vice-president for retail and consumer products, in an interview. 

It is a largely standardised category; it doesn’t require much touch-and-feel as, say, apparel. Hence, online works fine. And it is highly convenient​.”

Related topics: Business, South Asia, Asian tastes

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1 comment

Good News!

Posted by Vikas,

It would be good if Amazon starts delivering fresh fruits and veggies in Indian market. I have been a regular customer of Farm2Kitchen (they are into organic foods) and have also come to know that Farm2Kitchen is starting fresh produce deliveries in Mumbai and Pune. They have been in this business since long and as far as I know, are the only one of the few grocery portals which have sustained in the long run. Let's see how this segment develops in Indian market. Indian consumers are surely going to benefit with these kind of developments.

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