Amazon Fresh, a subsidiary of Amazon selling groceries has gradually advanced to different parts of the world, initiating with Seattle, Washington. The company now envisions India as a potential market and plans to invest heavily in the fast-moving consumer goods (FMCG) business. However, Amazon can’t begin operation until and unless it obtains FDI approval from Indian Government for the foods unit, reports ET.
Amazon proposes to stock and market farm produce, lentils and milk in India once the permit is received. The food chain will directly serve the products at the customer’s doorstep and add more value to the products. Talking about the ambitions for the Fresh initiative, Saurabh Srivastava, Director FMCG category management at Amazon said,
We will maintain the entire supply chain directly and right sourcing will be the key. Such value was not possible to be delivered had the government not liberalised the FDI policy.
The e-commerce platform already sells fresh vegetables, fruits, and dairy products in major metro cities including Mumbai, Delhi, Hyderabad and Bengaluru through Amazon Now, a venture for daily customer essentials. For the said business chain, the venture sources products from nearby supermarkets and delivers them packed in specialized temperature-controlled boxes — post a quick screening.
Due to lack of quality produce at supermarkets and inability of delivering fish and meat, Amazon Fresh seems a good option to the company. The company seeks to heavily invest in building the business rather than immediately generating profit. To this, Saurabh added,
Once we undertake direct sales and sourcing under Amazon Fresh, we would be able to add much more value. Our focus is on the long term. Of course, as our order volumes increase, we would drive economies of scale into the business. But we don’t want to focus on just one city to make it profitable right now and would rather expand our offering.
Moreover, Amazon Fresh will provide you access to all discounts passed on by the brands or neighborhood grocers, supermarkets and even wholesalers directly to the consumers. This move will help drive e-grocery shopping within the consumer lifestyle. For Amazon, FMCG category has shown a massive growth of 165% last year. With a network of over 9,000 sellers for FMCG products, the company currently sells 1.9 million products across all categories.
