Flipkart is all ready to step its foot into the grocery business through Farmermart. It is planning to deploy the farm to the plate concept through its new company. Initially, sales will be made online and the company can also open physical stores for the same.
Farmermart- What is it about?
This new entity of Flipkart will focus on food retail business. It has an authorized capital Rs 1845 crores. Farmermart would buy directly from local farmers and provide fresh produce to consumers at reasonable prices.
The grocery market is on a rise and will be Rs 1 lakh crore worth by 2023 in India. Due to the paucity of time, millennials prefer to buy the groceries from their home. Big basket and Grofers are already meeting their targets. The idea behind this project is to ensure the sustainable growth of the economy. Farmermart will boost the agricultural sector as it would provide impetus to the farm produce.
Kalyan Krishnamurthy, Flipkart’s CEO further stated that, “they aim to work with small farmers, food processing units and supply chains in such a way that it multiplies farmer’s income and brings quality food to consumers.”
He further added, “In line with the Government of India’s FDI policy, which allows 100% foreign direct investment (FDI) in food retail for food produced and manufactured in India, Flipkart is applying for appropriate licenses from the government.”
Competitor’s Move
Amazon have already invested about $500 million in food retail business. sell products under its name through online and physical stores. The number of startups is also growing in this particular line of business. According to the CLSA report, the online grocery store has the potential to grow to $99 billion over the next decade.
Walmart acquired e-commerce major Flipkart on May 2018. They have already approved Farmermart internally but are yet to file an application to the Department of Promotion of Industry and Internal Trade for the license.