Flipkart planning to enter food retail business to take on rival Amazon: Report
New Delhi | Jagran Buiz Desk: Walmart Inc. Flipkart has registered a new company 'Flipkart Farmermart Pvt' in India to enter into food retail business, run farm to fork operation and take on its rival Amazon, reported Moneycontrol. The report said the e-commerce company will operate its food retail business with a private label in grocery supply chains including offline stores. It quoted a source that said Flipkart can do a lot in food retail and that the board has consented to invest Rs 2500 crore to expand its grocery business operations.
The America-based company is late to the party as Amazon had already secured a food retail license in 2017 and has been investing to build its grocery business. Flipkart needs to apply for a license from DIPP to invest in the retail food business. The company hopes to bank on US-based Walmart's expertise to build its food supply chain. It already runs a wholesale business in India and has tie-ups with farmers.
However, there is no clarity whether Flipkart will open its stores or stick to the online business model, but there are possibilities that it might open stores in major cities such as Delhi, Mumbai, Kolkata, Chennai, etc. in the future. As of now, Big Basket (promoted by superstar Shah Rukh Khan) and Grofers are leading the food retail market space with lower costs as compared to offline grocery stores. They are expected to give a tough fight to Flipkart in the food retail business.
The online grocery market in the country is very small. As per a research, only 0.15 per cent out of 1.35 billion Indians makes purchases through online methods. But, the market is anticipated to grow by 68.7 per cent to over Rs 1 lakh crore at Compound Annual Growth Rate (CAGR) between 2018 and 2013.
The company declined to comment on the developments.
Posted By: James Kuanal