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Flipkart to enter food retailing with Flipkart Farmermart Pvt.

Oct 15, 2019, 10:19 am

Flipkart is all set to launch its food retail segment, Flipkart Farmermart Pvt in India. Since long Flipkart like its competitor, Amazon which is already running food retail business, has been mulling over the idea to have its own food retail business. Flipkart expects to do good business in food retailing like its e-commerce platform.

This should not come as a surprise that Flipkart is late to the party as Amazon had already been running this grocery business since July 2017 immediately after acquiring a food retail license.

Flipkart, now first, has to apply for a license and then need the approval of the Department of Industrial Policy and Promotion to move forward with its food retail business strategy.

Opening a sub-branded side-business which relies entirely on grocery can be quite tricky to master. Luckily, Flipkart is owned by Walmart which has years of food retailing experience. Walmart has an already established relationship with farmers for grocery ad food produce.

Flipkart would not have to start from scratch to figure out this part. Furthermore, an already established relationship with the farmers gives Flipkart a leeway and a boost for expanding their business.

It is too early at this point to substantially comment on Flipkart’s strategy. It is not clear yet as to whether they will open up shops or would they proceed to sell groceries online. But we cannot reject the possibility of Flipkart opening stores all over the country, altogether.

The online grocery shopping is a fairly new concept in India but it shows much potential in the upcoming future. According to research firm Research and Markets, only 0.15 percent (or two million out of 1.35 billion) Indians make purchases through online channels.

However, the market is anticipated to expand at a compound annual growth rate (CAGR) of 68.66 percent between 2018 and 2023 to reach over Rs 1 lakh crore.

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