Amazon Retail India (ARIPL), the Indian unit or Amazon that manages the supply of grocery and food items, has got Rs 240 crore fresh capital infusion from its parent entity – Amazon Corporate Holdings, Singapore.
According to the company’s RoC filing with MCA, US-registered parent entity Amazon.com, has also participated in the funding round, reveals business intelligence platform paper.vc.
The fresh capital comes amidst skepticism over FDI in e-commerce where these marketplaces are prohibited from holding stakes in its affiliates and sourcing more than 25 percent of products from one distributor.
The government in this regard had also asked Amazon to separate equipment, machinery, and warehouses for its food products and shouldn’t share anything with its marketplace arm.
However, it later clarified that FDI in other sectors (such as food retail) would not be hindered by new FDI rules for e-commerce marketplaces.
If the plan goes through, Amazon will give a tough fight to incumbents like Bigbasket and Grofers that have been backed by renowned investors like Alibaba and Softbank respectively.
In a nutshell, online grocery will become a three-front battle amongst Softbank, Alibaba, and Amazon. Moreover, Flipkart entry in this space will bring Walmart to compete as the fourth offshore investor.
Incorporated in 2017, ARIPL had received a license to retail food products through an inventory-led model. The subsidiarry of Amazon is engaged in procuring and selling grocery items like packaged foods, cooking and household stock, personal care items, and others.
ARIPL buys goods from retailers and distributors, then sells it under the Amazon Pantry storefront. Besides, it runs Prime Now, an independent two-hour delivery service launched in May 2018.
The development was reported by Business Standard.