Amazon to start food retail biz in India this Diwali

Mumbai: Online retail giant Amazon.com Inc is all set to make its debut in the domestic food retail business this Diwali, potentially expanding its business in the fast-growing Indian economy.

As per a report in the Economic Times, Amazon will make its entry "through subsidiary Amazon Retail India Pvt Ltd, subsequently plans to start a private grocery label in India as it has done in the US."

Amazon has planned to invest $500 million in the food segment, over and above the $5 billion it had already committed to investing in India.

Cheaper smartphones, increasing internet penetration and steep discounts have led to a surge in domestic online shopping for everything from gadgets to clothes and food items in India.

Still, mom-and-pop stores account for the biggest share of grocery sales, offering organised players huge growth potential.

Currently Amazon offers food products in India via Amazon Pantry, where retailers including joint venture Cloudtail sell various products. It also offers same-day grocery delivery on its Amazon Now app through a tie-up with Indian retailers Big Bazaar, Star Bazaar and Hypercity.

Venture-funded Flipkart, whose backers include Tiger Global, Tencent Holdings and Microsoft, also plans to move into the groceries space, company executives have said.

With PTI Inputs