Walmart-owned online marketplace Flipkart incorporated a new entity under the name Flipkart FarmerMart on October 4 to tap the food retail space.
“The company has got the nod to invest Rs 2,500 crore from the Flipkart board to expand its operations in the grocery business,” a source told Moneycontrol.
The new venture will retail food products, manufactured and produced in India, through offline and online distribution and set up infrastructure throughout India for efficiently undertaking retailing of food products in India, according to its Memorandum of Association filed with the Registrar of Companies.
“The board approval to obtain the license is in paving the way for Flipkart to formally submit its food license application,” a person aware of the matter told Economic Times.
Amazon already has earmarked USD 500 million over the course of five years to sell food products, sourced and packaged locally, in India. The firm secured a food retail licence in July 2017.
“We have very less focus on what the competition is doing but instead we focus on what customers are looking for. We take pride in every single thing we have done, it’s a local playbook, it’s not an adaptive playbook from somewhere else. Everything that we do our team brings us together, it’s not something that has happened in the US,” Flipkart’s Chief Corporate Affairs Officer Rajneesh Kumar told Business Insider in an interview.
“We have a huge backing of our parent company which is best in grocery. Walmart’s business is 60-70% in food, so whenever Flipkart seeks the help, we can get the best practices,” he added.
According to Research and Markets, the market is anticipated to expand at a compound annual growth rate (CAGR) of 68.66% between 2018 and 2023 period, to reach to Rs 1,03,413 crore by 2023.