New Delhi: The recent developments in Indian’s online grocery segment have indicated an intense battle heating up between Walmart-Flipkart and Amazon in India to capture a better pie of the online grocery market.
In this week, we have seen e-commerce giant Amazon has rebranded its grocery service Amazon Now to Prime Now. Well, it makes sense for Amazon to capture the consumers who have evolved in ordering milk and bread online. As a Franchise India report said, the online grocery market is expected to be Rs 2.7 billion by 2018-19. Reason being we see online grocery as a segment has been intently targeted by e-commerce players including Flipkart. The company has recently indicated its plans to launch grocery services in five cities including Hyderabad, Chennai, Mumbai, Delhi-NCR, and Pune by July.
Commenting on the development, a Flipkart spokesperson said, “We are looking to solve consumer needs in (the grocery) category. That’s the first step, and we will build the category through the course of the year.”
In an earlier instance last year, Flipkart’s CEO Kalyan Krishnamurthy said, “Eighty per cent of the units bought in India is in the groceries segment. The grocery market is almost as big as $400 Mn-$600 Mn, so we will have to get into it.”
“Speed of delivery and convenience is of prime importance to customers especially when it is to do with grocery items. We are scaling up and investing in our infrastructure and delivery network, so that we can increase our speed of delivery and provide a superior experience to customers, including those shopping on Prime Now,” said Sameer Khetarpal, Director, Category Management (Grocery), Amazon India.
To beef up the logistics and supply chain, the company in last month, launched a specialized network of 15 dedicated Fulfilment Centres (FC) for Prime Now to increase the speed of delivery and provide a better experience. These fulfilment centres are equipped with temperature-controlled zones, a first for Amazon in India to store and deliver perishable products such as fruits & vegetables (F&V), dairy products, chilled & frozen products.
“Besides this, the centres will store smartphones, laptops, kitchen appliances, other consumer electronic products, beauty products and household supplies,” said Khetarpal.
Indian online grocery segment already has the existence of a host of startups such as ZopNow, Satvacart, Godrej Nature’s Basket, Quikr, Grofers, and DailyNinja, among others.
Among them, BigBasket recently has raised a $300 mn Series E funding.
On the other hand digital payment and e-commerce company Paytm had plans to tap BigBasket. As Paytm said, it registers more than half of Paytm Mall’s orders from the grocery and FMCG categories.
Another company Grofers reported being in talks to raise $60-65 mn in funding from Japan’s SoftBank Group with Tiger Global Management’s support.
Amazon India head Amit Agarwal also said that its company expects groceries and household products to account for over half of its business in the country in the next five years. Here, Walmart’s acquisition of Flipkart has offered the latter better scope to play in the Indian online grocery market. Hence, it's safe to say that in coming time, we may see more intense discount/strategy wars between the two rivals Amazon and Walmart-Flipkart's combined entities in India.