Amazon wants to make further inroads into the food delivery and has filed an application with the Department of Industrial Policy and Promotion (DIPP) which will allow it to stock and sell locally produced items online, reports the Economic Times. The publication added that Amazon will be making an investment of $500 million for online food retailing. A spokesperson for the company confirmed to MediaNama that it has made an application to the DIPP.
“We are excited by the government’s continued efforts to encourage FDI in India for a stronger food supply chain. We have sought an approval to invest and partner with the Government in achieving this vision.”
Last year, the government allowed 100% FDI in single brand retailing for the ecommerce sector, giving a boost to sub-industry sectors including online grocery startups. However, this was applicable only in food retail. Most startups in the grocery delivery segment also sell other household items such as soap, shampoos, cleaning agents etc.
Currently, online grocery delivery service Grofers, which has applied for FDI in food retail on ecommerce, will most likely have to separate its food business from the rest of its operations to attract investment.
Amazon currently has two services which deliver groceries, Amazon Pantry and Amazon Kirana Now, and it is unclear if the new retail business will add to these, or be launched separately.
Amazon Pantry is a service which delivers household items and grocery and is present in 14 cities in the country. Pantry ships goods in a box that can hold up to 3 cubic feet (or 15kg) of products and will charge users a delivery cost of Rs 20 per box ordered.
Kirana Now is a local grocery service launched in Bangalore in March last year. Pantry service is a little different from Kirana Now in that Amazon will deliver Pantry items in 24 hours as opposed to 2-4 hours for Kirana Now. It will also deliver household items as opposed to fruits/vegetables and other perishables delivered by Kirana Now. Amazon had partnered with local kirana stores to offer the service.
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