Amazon has decided to delay the launch of its online food retail venture.
According to some reports, “The company needs to keep this separate from its marketplace, which functions as a platform to connect sellers with buyers. Food is the only segment where it’s allowed to sell directly to consumers.”
“The warehouses that Amazon uses are leased to Amazon Seller Services Pvt., some of which need to be moved to Amazon Retail India Pvt. as part of the segregation. In some cases, lease agreements will have to be signed with both entities, said one of the persons cited above. The company will also have to get Food Safety and Standards Authority of India (FSSAI) licensing.”
Amazon is the first global company to seek and get government nod to sell food made and packaged in India directly to consumers. India allowed 100% foreign ownership in food retail last year to promote local farm produce. Amazon and other foreign retailers are not allowed to sell any non-food items directly to consumers.
Spokesperson of Amazon said, “We have not announced any dates or details about our approval for food retail licence and we cannot comment on future plans.”
Amazon plans to invest $500 million in India over five years to sell third-party and its own private-label food articles, sourced and packaged locally. The company launched its first private grocery label in the US last year with products including coffee and baby food. Private label items are sold exclusively through Prime membership in the US and are priced lower than other popular brands. As it expands the grocery business in its home country, it will also open offline Amazon Go stores that will offer customers a checkout-free experience through technology.