Amazon’s investment of Rs 240 crore signifies that it is going ahead with expansion in food and grocery retail in India

April 2, 2019

Amazon has invested Rs 240 crore in its Indian food-only retail business, which acts as a seller of groceries and other packaged food products to the company’s local ecommerce marketplace. And this has come more than a month after India’s revised guidelines for FDI in ecommerce kicked in, which had initially put Amazon’s food retail investments in jeopardy.

According to regulatory filings sourced from business signals platform paper.vc, Amazon Retail India received Rs 240 crore largely from existing shareholder Amazon Corporate Holdings, a Singapore-based entity engaging in food retail across ASEAN countries. The investment also included a token amount from Amazon.com, the US-based parent company.

Amazon’s capital infusion in the business unit signifies that the company is going ahead with its planned expansion in food and grocery retail in India, a segment that it had said it is bullish on.

Amazon has food retail business currently serves customers in 100+ cities across India and are on track to scale the business further by adding more selection and expanding reach to serve customers in more pin codes.

Food and grocery made up the lion’s share of India’s overall retail market in 2018, contributing $540 billion of the total $880 billion in retail, according to market researcher Forrester.

The Department for Promotion of Industry and Internal Trade (DPIIT) had disallowed affiliates of an ecommerce marketplace from acting as sellers on the platform. Later, the government had clarified that FDI in other sectors (such as food retail) would not be hindered by its modified FDI guidelines for ecommerce marketplaces.

Amazon Retail India acts as a seller of groceries and food products on Amazon.in, specifically driving business under the Amazon Pantry and Amazon Now services.

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