The Indian independent subsidiary of American ecommerce giant – Amazon has got a nod from the Government of India to invest $500 million in food retail market. Arm up BigBasket and Grofers, because Amazon is your direct competitor now.

Amazon is already a major ecommerce giant in Indian online market, and now it is all equipped to try its hands on the online food retail market; as it received a green signal from the Department of Industrial Policy and Promotion (DIPP) for investing $500 for food retailing. With this, Amazon will start up a fully-owned subsidiary in India which will carry out food stocking and selling it online. The nod from Government will give Amazon an edge over its e-e-retailing rivals and make its prominent entry in the new food market.

Amazon’s food retail will be a fierce competition for existing food and grocery stores like Godrej’s BigBasket and Grofers. India’s grocery market is estimated to be $310 billion but the organized online and offline retailers only get 5% of the entire market share. Looking at the potential of market, Amazon will jump right in to provide a serious challenge to existing online grocery and food stores with its own private and well-known Amazon label.

Back in 2015, Amazon had launched a third-party online service – Kirana Now, which was aimed to deliver grocery goods within very short time using its own logistics, staff and warehouses; but it relied on other sources for the bulk supply of goods. Amazon can potentially control every aspect of the supply chain of the food business and not be dependent on third-party sellers on its marketplace once the approval comes through.