Flipkart had earlier experimented with the hyperlocal delivery business in India but soon shut it down. Now, the company is again trying its hands with a similar service as it has partnered with vendors to deliver fresh fruits and vegetables in Hyderabad.
This new pilot program from the e-commerce firm comes at a time when the company is waiting for internal process to be completed before it applies for food retail permit under a newly formed entity.
A report from ET says that the company is doing so to comply with the government’s new FDI policy to own food inventory, citing people aware of the matter without naming them. In the same report, a top company executive was quoted saying: “Even though Flipkart has steered away from venturing into the fresh fruits and vegetables space directly given the complexity of the business’ supply chain and regulatory compliances, with the entrance and aggressive push by its competitors, it is no longer a segment that can be ignored.”
He also added that the license application is in the process. Another person aware of the development at the company says that Flipkart has partnered with Waycool Foods & Products as well as other sellers to launch operations.
A few months ago, in October 2019, Flipkart registered a new entity named Flipkart FarmerMart which has an authorised capital of ₹1,845 crore, in line with the government’s foreign direct investment (FDI) policy which allows 100% FDI in food retail for food produced and manufactured in India.
Recently, Reliance started its web portal Jiomart with early pilots in Mumbai which essentially combines Reliance Fresh with its consumer base of Jio, now the biggest telecom company in India. Interestingly, Flipkart owner Walmart too announced a significant investment in Ninjacart. While the terms of the transaction were not disclosed, sources stated that the retail giant was likely to invest about $10 million in the first tranche and going up to as much as $50 million, in Ninjacart.
However, both Jiomart and Ninjakart are still in the process of acquiring market share. BigBasket is probably the biggest competitor for Flipkart’s fruits and veggies debut. The company has been on a roll and has continued to expand rapidly. Amazon too seems to be piloting its ‘Amazon Fresh’ service in select areas of Mumbai.