Walmart-owned online retail company Flipkart has registered a new company called Flipkart Farmermart Pvt in India to expand its footprint in the food retail space, according to a report by Moneycontrol.
The company plans to operate a full-fledged fledged food retail business, including its own private label, a grocery supply chain and even open stores, under the new label.
“There is a lot more that Flipkart can do in food. The board has consented to invest Rs 2,500 crore to expand its operations in the grocery business,” a source is quoted as saying in the report.
With this, Flipkart is planning to take on its rival Amazon, which has been investing in its grocery business since July 2017.
Walmart's expertise in building its food supply chain in America is likely to provide Flipkart some edge to establish a business in India. “That will be a big help for Flipkart, it being a subsidiary company. It will also allow Walmart to bring in its understanding and wherewithal of the grocery business to consumer business,” the source added.
India's online grocery market is still opening up as just two million out of 1.35 billion Indians buy groceries online, according to research firm Research and Markets. However, the market is expected to expand at a compound annual growth rate (CAGR) of 68.66% between 2018 and 2023 to reach over Rs 1 lakh crore.