Amazon India, the domestic arm of world’s largest ecommerce player, plans to launch its online food retail business during this year’s Diwali period which accounts for more than 25% of the yearly sales of businessmen. It will make its entry through its subsidiary Amazon Retail India Pvt Ltd, and then subsequently plans to start a private grocery label in India as it has done in the US. The entry of the global behemoth is expected to trigger a price war with organized brick and-mortar retailers and online grocery companies. The firm has already announced that it will invest $500 million in the food venture over the next 5 years.
As of now, the company offers food products in some Indian cities through Amazon Pantry from third-party sellers. It also offers same-day grocery delivery on its Amazon Now app through a tie-up with retailers such as Big Bazaar and Hypercity in some cities. However, with the start of its own food retail arm, it will now sell directly to consumers. Amazon debuted its first private grocery label in the US last year with products including coffee and baby food. The private label items are sold exclusively through Prime membership in the US and are priced lower than other popular brands.