Amazon Retail India Pvt Ltd, the retail arm of e-commerce giant Amazon, will soon open its first farm collection center in Pune, sources privy to the development said. Under its farm-to-fork initiative, Amazon will directly purchase vegetables from farmers, who would be paid within 24 hours.
This is pursuant to Amazon’s focus on using technology to enable farmers to directly offer the products to customers and unlock greater value.
A full-fledged operational launch of the center is expected soon, top sources said. Amazon’s foray into fresh food retail business in India follows a $500 million investment the company made into food and grocery segments after getting government approval in 2017.
The online marketplace’s rival Flipkart has already signed up local farmers and strengthened its fresh food offerings with the help of Walmart’s best-price wholesale stores.
“Amazon Retail’s vision is to offer the largest selection of fresh fruits and vegetables to our customers in two hours.
We are engaging with farmers and government bodies to develop a sustainable farm-to-fork model by investing in technology,” Amazon India told TMS.
Even though the online grocery and fresh food market in India constitute only 0.2 per cent of the overall $580 billion retail markets in the country, the segment is growing at a pace of 55 per cent, and is estimated to touch $10.5 billion by 2023, a report by market intelligence firm Redseer said.
Currently, the grocery and fresh food sales make up for 40 per cent of the total purchases made through e-commerce, but the market was largely dominated by hyperlocal players like BigBasket and Grofers until Flipkart scaled up its offerings.
Amazon and Flipkart, the two major rivals in the Indian online marketplace, have also made investments in supply chain delivery start-ups Ninjacart and Shadowfax respectively to scale up their last-mile delivery capabilities, particularly groceries.
As per a recent survey by market research firm Nielsen, an increasing number of consumers are buying FMCG products, including groceries and fresh foods, in the online space.
The consumer base for this segment from metros especially has increased, the survey said. On the other hand, Flipkart and Amazon are bullish on scaling up their fresh foods segment to tap the growing market. “Amazon Fresh was announced during late August in select pin codes in Bengaluru and will soon be launching in Delhi-NCR, Mumbai and Hyderabad.
Using Amazon Fresh, customers can enjoy a complete grocery experience with a host of exciting deals and offers across a selection of over 5,000 fruits and vegetables, dairy, meat, ice creams and dry grocery like staples, packaged food, personal care and home care, which are powered by Amazon Prime Now service to get ultra-fast two-hour delivery,” the e-commerce giant said.
“Through the Amazon Fresh store on Amazon.in, Prime members will get exclusive access to the fastest two-hour delivery slots for Rs 49. All customers get convenient two-hour delivery slots from 6 am to midnight with free delivery for orders above Rs 600. Orders below Rs 600 will be charged a delivery fee of Rs 29,” it added.
Growth in online
Grocery market The online grocery and fresh food market is growing at a pace of 55 per cent, and is
estimated to touch $10.5 billion by 2023, a report by Redseer said.