Here comes the grocery price war in India

Photo credit: Pixabay.

Amazon’s entry into India in 2013 set off a bruising price war with local ecommerce rivals Flipkart and Snapdeal, which is still playing out. Today, the launch of Amazon Pantry for everyday household essentials sets the alarm bells ringing for local online players in grocery delivery, led by BigBasket of Bangalore, as well as supermarkets and the mom-and-pop stores that dot every neighborhood in India.

For now, Amazon Pantry is available only in Hyderabad, capital of the southern state of Telangana, where Amazon has set up a massive warehouse. At first glance, there’s a wide selection of brands in cooking essentials like staples, oils, and spices, ready-to-eat foods like cereals, and household supplies like detergents. There appears to be a slight markdown in prices compared to the same items in BigBasket. Amazon promises “better prices” as one of the benefits of using its Pantry, which will deliver grocery the next day.

BigBasket remains the go-to place online, however, for ordering perishables like fruits, vegetables, eggs, and dairy products. It has an inventory-based model with a private label for the fruits and vegetables it sources and stocks. This helps it to ensure consistent quality. It handles 35,000 orders a day across the country.

Amazon Pantry is a bigger play into the grocery delivery business. Unlike Amazon Now, it’s part of the Amazon India website, with a full range of brands and Amazon’s standard warehousing and delivery.

An arena strewn with fallen players

Photo credit: Pixabay.

Several local players who entered this space have bitten the dust, including well-funded ones like PepperTap. Indian ecommerce players Flipkart and Paytm and taxi app Ola too have burnt their fingers, because the sourcing and delivery of items with short shelf lives is tricky, especially in a country replete with neighborhood suppliers, including those who come around with fresh vegetables in pushcarts.

Amazon has been experimenting with local grocery delivery in Bangalore. It initiated an Amazon Kirana Now program to deliver supplies from neighborhood stores – a kirana shop is a local mom-and-pop store in India. This appears to have made little headway.

Earlier this year, it added fresh fruits and vegetables to Amazon Now in a few places in Bangalore. The app-only store delivers fruits, vegetables, and dairy items as well as everyday grocery. However, it hasn’t set the Ganges on fire yet.

Amazon Pantry is a bigger play into the grocery delivery business. It remains to be seen how soon Amazon Pantry will expand to other cities, and whether fresh fruits and vegetables will be added on. In the US, Amazon is reported to be experimenting with a model where users place orders online for grocery, including perishables, and then pick it up at a preset time from a drive-up store. It’s unlikely that will work in the crowded traffic of Indian cities.

For the time being, BigBasket will be breathing easy, because it’s hard to replicate its consistency and quality in the delivery of perishables. But every grocery retailer in India, both online and offline, will be watching every move Amazon makes in this space.

See: India’s largest and best funded laundry startup shuts shop. Here’s why

This post Here comes the grocery price war in India appeared first on Tech in Asia.

from Tech in Asia https://www.techinasia.com/grocery-price-war-india-amazon-pantry
via IFTTT