With the government approving Amazon’s proposed $500 million investment in the sector, the floodgates of the food retail sector seem to have been thrown open. Most analysts believe that after e-commerce, the food retail sector will be the next big space which is a low-hanging fruit say some. They expect the sector to see a few new entrants and consolidation to heat up further.
“Amazon has a huge advantage with an end-to-end supply chain. Be it procurement or online delivery, none of the other players in the food sector stand a chance against Amazon,” says Sanchit Gogia, Chief Analyst and CEO of Greyhound Research.
After acquiring US-based Whole Foods Market Inc in early February 2017 for $13.7 billion and having a firm footprint in the brick and mortar space in the US, it was natural for Amazon to secure its presence similarly in India. Amazon can unleash its potential in the food retail sector in India. It has been big on procurement unlike Big Basket which does not have the buying power of the former, said Gogia.
“Amazon can spend money on online footfalls and has the ability to get amazing prices from the back-end as they are big on procurement,” he said.
If there is a competition that can match up to Amazon, then it is Walmart, says Gogia. However, Amazon has a head start in India compared with Walmart which does not have an online presence like the former. Walmart has a major procurement advantage in India but that is restricted to the B2B sector.
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Sanchit Vir Gogia: Sanchit is the Chief Futurist, Founder & CEO of Greyhound Knowledge Group, a Global Strategy & Transformation Research, Advisory & Consulting Group. He also serves as Chief Analyst & CEO of Greyhound Research, a Global, Award-Winning, Independent Technology & Innovation Research, Advisory & Consulting firm. To read more about him, click here.
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