How This Indian E-commerce Giant Is Looking To Fight Its Global Rival In Food Retail Market Flipkart has registered a new entity named Flipkart Farmermart Pvt and is preparing to apply for food retailing licence

By Shreya Ganguly

Opinions expressed by Entrepreneur contributors are their own.

You're reading Entrepreneur India, an international franchise of Entrepreneur Media.

At a time when competition between e-commerce giants has been fueling due to festive sales, Walmart-owned e-commerce giant Flipkart is now looking to lock horns with Amazon in the food retail space. According to media reports, Flipkart has registered a new entity named Flipkart Farmermart Pvt and is preparing to apply food retailing licence .

Citing sources, Moneycontrol reported that the company board has agreed to invest INR 2,500 crore to expand operations in grocery division. According to the report, the e-commerce giant will operate a full fledged food retail business including private labels, grocery supply chain and open stores through the new company. The report also stated that Flipkart is looking to rely on Walmart's expertise in the food supply chain business to capture the market and stay ahead of its rivals.

"In line with the Government of India's FDI policy, which allows 100% FDI in food retail for food produced & manufactured in India, Flipkart is applying for appropriate licenses from the government. We've secured all internal approvals for the same already. This newly registered local entity "Flipkart Farmermart Pvt Ltd.' will focus on food retail and is an important part of our efforts to boost Indian agriculture as well as the food processing industry in the country," said Kalyan Krishnamurthy Flipkart Group CEO in response to Entrepreneur India's query.

"We're looking forward to invest more deeply in the local agri ecosystem, supply chain and working with lakhs of small farmers, farmer producers organisations (FPOs), food processing industry in India to help in multiplying farmers' income and bring affordable, quality food for millions of customers across the country," Krishnamurthy said in a statement.

Not First Time For Flipkart

This is not the first time Flipkart has ventured in the food and grocery business as the e-commerce company had launched its Supermart in August 2018. Through this, Flipkart offers grocery products such as staples, FMCG, dairy products and also private labels.

The service is currently available in Bengaluru, Chennai, Hyderabad, Delhi and Mumbai. In its official blog post, the company had said that it will be collaborating with farmers, producers organisations and local micro, small and medium enterprises (MSMEs) to build a sustainable ecosystem and also generate jobs.

Flipkart Vs Amazon India

The Indian e-commerce giant faces stiff competition from Amazon India in India currently. Now both the companies will be competing with each other in the food retail front also.

According to media reports, Amazon had received its food retail licence in 2017 and has been working since then to develop its grocery business. It had also committed to invest $500 million in the business. In March, it was reported that Amazon had invested INR 240 crore in its Amazon Retail India (ARIPL), responsible for managing supply of grocery and food items.

Amazon's ARIPL procures and sells grocery items such as packaged foods, cooking and household stock, personal care items. It also sells perishable products such as fruits and vegetables. The company also recently launched a two-hour delivery service for fruits and vegetables.

Why Bet On Food Retail Space?

Food retail space has been garnering a lot of attention by the industry giants . Reliance Retail, Aditya Birla Retail, Future Value Retail are some of the dominant players in the market. BigBasket, Grofers, Amazon Pantry are some of the notable players in food e-tailer space. According to a 2019 report by Global Agricultural Information Network (GAIN), the food and grocery retail sector in India is dominated by traditional stores such as neighborhood shops or kirana stores, which constitute about 98 percent of the total market share.

The report also revealed that the Indian food retail market is expected to cross $800 billion by 2023. Also, the new trade formats such as supermarkets and hypermarkets are expected to grow from two to four percent by 2020.

Shreya Ganguly

Former Features Writer

Covering startups and investments for Entrepreneur India. Previously a startup correspondent at Inc42. Reach out to me with interesting story ideas at 

Related Topics

Business News

'I'll Gladly Cancel': Customers Livid as Netflix Is Reportedly Increasing Subscription Prices—Again

The Wall Street Journal reported that price hikes are set to roll out following the actors' strike.

Business News

These 11 Retailers Are Most Likely to File For Bankruptcy in 2023, According to a New Report

Several well-known retailers already filed for bankruptcy in 2023 — now, a new report is highlighting the retailers most likely to follow suit.

Business News

JPMorgan CEO Jamie Dimon Says AI 'Is Real' and Will Eliminate the 5-Day Work Week. Here's How His Company's Going All In.

The financial services firm advertised for thousands of AI-related roles earlier this year.

Starting a Business

How To Sell on Etsy in 2023: A Comprehensive Guide

Want to start selling your handmade goods online? This article outlines how to start and grow your business using Etsy.

Business Plans

Want to Know If You Have a Great Business Idea? Ask Yourself These 10 Questions.

Business expert Eric Butow gives you a list of probing questions to help you analyze your idea in the new book "Write Your Own Business Plan."

Starting a Business

From Launch to Liftoff — Insider Secrets That Will Help You Build a Thriving Startup

Here's what you need to know to launch a successful startup.