Amazon Seeks Fresh Investment in India With New Grocery Service


A few weeks ago we ran a feature on Amazon’s growing significance in the digital world : What’s the big deal about $1 out of every $2 spent online in the US going to Amazon?

Amazon is now making news by seeking permission from the Indian government to start New Grocery Service ! This is interesting since the Indian grocery market is fragmented, predominantly mom-and-pop shops across the country. A few global retailers have tied up with Indian business houses to expand into the Indian market.  Amazon’s entry is expected to further shake up the market.

Indian Grocery shop. Photo credit: flickr.com/photos/fvfavo/30990524596/

Media analysis of Amazon’s move include

WSJ – Amazon Seeks Fresh Investment in India With New Grocery Service : Amazon, which dominates online shopping in the U.S. but has gained little traction in developing countries, is investing $5 billion in its logistics network and splashy advertisements in the world’s second-most-populous country. It has made rapid progress here since launching in 2013, with some analysts figuring its sales are within striking distance of its dominant homegrown rival, Flipkart Internet Pvt.

The push to sell food directly to consumers in India could resemble the firm’s Amazon Fresh, a subscription service in the U.S. and U.K. that provides quick food delivery for online orders.

Marketwatch – Amazon wants its grocery service in previously restricted India:   The e-commerce company AMZN, has sought approval from India’s Trade Ministry to invest about $500 million in the new venture. The new Amazon grocery service would take advantage of recently eased restrictions on foreign retailers and deliver mostly local food products such as fruits, vegetables and other staples, according to one of the officials.

“We are excited by the government’s continued efforts to encourage FDI in India for a stronger food supply chain,” an Amazon spokeswoman said, referring to foreign direct investment. “We have sought an approval to invest and partner with the government in achieving this vision.”

YahooFinance -Can Amazon Become India’s Everything Store? – Amazon.com Inc. plans to expand its online grocery delivery operations even as homegrown rivals Flipkart and Paytm scale back in India’s $413-billion grocery market. The focus is on increasing the customer base over the next few years and not chasing profitability, said Saurabh Srivastava, head of the fast moving consumer goods (FMCG) category at Amazon India. The world’s largest e-tailer’s Chief Executive Officer Jeff Bezos has committed $3 billion to the India business, betting that growing internet adoption will prompt more people to buy online. From food items to toiletries, the e-tailer offers 1.9 million consumer good products across categories in India.

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