Amazon, the e-commerce giant, plans to open food-only outlets in India along with an online platform for selling items produced locally. The company has approached the government to approve its plan to open such outlets in the country. If the government approves this plan, Indian consumers soon get a chance to shop from Amazon brick-and-mortar stores. At present such stores are present only in the United States.
According to the Economic Times, Amazon plans to undertake “retail trading of food products (produced or manufactured in India) to customers at any location through any channel, offline or online, including e-commerce, across India. Amazon Corporate Holding Pvt Ltd, based in Singapore, will hold 99% stake of this proposed retail entity and Mauritius-based Amazon.com Inc. will own the rest.
Amazon Corporate intends to invest Rs 3,500 crore in India over a period of five years. The retail outlets will sell locally produced and packaged food products manufactured under its own labels or by third parties. Amazon India representative stated that the company is excited by the government’s efforts to encourage Foreign Direct Investment (FDI) in the country for strengthening the food supply chain.
The government enacted a legislation in June, 2016, allowing 100% FDI in the food-only retail segment for foreign companies to sell items produced and sourced locally. However, it did not get the desired response and failed to attract global retail giants such as Walmart, Heinz and Nestle. Amazon’s plan to open food-only retail outlets through FDI has come as a relief for the government.