Amazon Retail receives $35 million from parent to improve in food e-commerce

Multinational marketplace platform Amazon invests approximately 35 million dollars (240 Crores in Indian Rupees) into Amazon Retail India’s food e-commerce arm.

The Indian department includes the Amazon Now and Amazon Pantry services. Both are responsible for the grocery, household and other food products’ sales in India. A company’s representative talked to the Economic Times: “Our food retail business currently serves customers in 100+ cities across India. We are on track to scale the business further by adding more selection and expanding reach to serve customers in more pin codes.”

FDI e-commerce guidelines

Earlier this year in January, reports showed that the marketplace platform would stop the sale of food products. This in order to comply with the new FDI e-commerce guidelines in India. The new guidelines prohibited online marketplaces from making more than 25% of purchases of a vendor. However, it was clarified by the government that companies with FDI in food retail were not included in the guidelines. This meant they could retail through e-commerce. The platform resumed their grocery services operations after this brief pause.

The grocery services of Amazon are a major plan in the Indian food retail for the platform. The company committed 500 million dollars to the Indian market. The head of Amazon India, Amit Agarwal, said groceries and household products are expected to account for over half of its business in India in the upcoming five years. A research report by Citi said that Amazon India is expected to reach 70 billion dollars in GMV (gross merchandise volume). That would account for a net sales of 11 billion dollars by 2027. The Indian e-commerce market is currently at a value of 200 billion dollars. It is predicted to increase to 1.2 trillion by 2021.