Amazon Expects Boost on Its Grocery Business in India

Amazon.com Inc, the e-commerce giant, believes that groceries and household products will account for more than half of its India business in the next five years, while it attempts to widen its offerings in the segment and enter areas such as fresh produce.

India head of Amazon Amit Agarwal said in an interview last week that groceries and goods like creams, soaps, and cleaning products were already their biggest product categories on Amazon based on the number of units it sold in India.

“I would not speculate on when we would launch AmazonFresh but, absolutely, if you ask me the next five years of vision – from your avocados to your potatoes, and your meal to your ice cream – we’ll deliver everything to you in two hours,” he said.

AmazonFresh was launched more than 10 years ago in the US market. It is the company’s flagship fresh grocery delivery service. Meanwhile, in India, Amazon at present offers some groceries by utilizing a service called Pantry. It is also cooperating with local vendors in four cities for Amazon Now, its service that claims to deliver goods in two hours.

“Probably in the next five years groceries and consumables would be more than half of our business,” said Agarwal.

He also claimed that Amazon has already begun working on various experiments with a few fresh groceries in India, which already accounts for its largest customer base outside of the United States.

According to Morgan Stanley, Indian e-commerce market is set to grow to $200 billion in ten years with cheaper mobile data spurring online shopping, making it more accessible to consumers.

Amazon plans to take advantage of this opportunity while already having more than 100 million registered users in the country.

“We want to get the next hundred millions customers shopping with us,” said Agarwal, saying that the retail titan aims to impress its clients with product exchange and payment offerings.

India has become one of the biggest e-commerce battlegrounds, with almost 500 million Indians using the Internet this year. It is also Asia’s third largest economy.

Meanwhile, retail giant Walmart is creeping closer to a deal to buy a controlling into the homegrown e-commerce business FlipKart. FlipKart is already backed by giant investors like SoftBank, Microsoft, and Tencent.

“I feel extremely excited that e-commerce is attracting so much funding. Otherwise, we’d have been wrong in going about it such a big way,” said Agarwal.

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