In order to expand its business and reach across the nation, India’s popular e-commerce organization will be entering the food retail business, its Chief Executive said on Tuesday. Kalyan Krishnamurthy, Flipkart Group CEO, stated to TechCrunch that after selling majority stake in the company to Walmart for $16 billion last year, Flipkart has registered an entity called “Flipkart Farmermart Pvt Ltd” in consideration with local laws it will focus on food retail.
He said, “The extended business represents an important part of our efforts to boost Indian agriculture as well as food processing industry in the country.” Earlier this week, Flipkart revealed in a regulatory filing that it has authorized to invest $258 million in a new venture.
The company has secured approvals from the board to enter the food retail business, Krishnamurthy stated. The Flipkart chief executive was quoted saying, “We’re looking forward to invest more deeply in local agri-ecosystem, supply chain and working with lakhs of small farmers, Farmer Producers Organisations (FPOs), food processing industry in India, helping multiply farmers’ income and bring affordable, quality food for millions of customers across the country.”
This big announcement came after Flipkart’s main competitor Amazon begin to expand its food retail business across the country. The company has already committed to invest about $500 million in the term of the next five years to build its own market of private label food products and interact with third-party sellers.
For e-commerce organizations, Food and Grocery are compelling categories as consumers opt for their grocery and perishable supplies much more frequently than they buy office other products. And it’s a big opportunity on which Flipkart wants to cash on. Having a backup from Walmart will surely be a benefit for this new initiative by Flipkart.