Amazon stepping into food retail
Last year in July, making a move that surprised many, Amazon acquired Whole Foods. This was seen as a large investment on its part, into physical stores in order to grow. It also entered the grocery delivering market with Amazon Fresh, earlier this year. The reason behind this may lie in the fact that it is now getting it’s hand upon lots of shopping data, which is useful for the expansion of its online grocery business and private label offerings.
In the past year, grocery stores have slowed their new store growth and instead focused on acquisitions of technology or platforms. Walmart bought Indian e-commerce company Flipkart, Target bought delivery service Shipt, Kroger invested in British online supermarket Ocado and bought meal kit company Home Chef, and Albertsons also bought a meal kit company, Plated.
Amazon has also recently rolled out its own food retail business in India, starting with Pune. This makes it the first foreign e-commerce player to set up in the food retail sector in India and according to Economics Times, it would take it at least a quarter to roll out the food retailing business worldwide.
After all, in China, Alibaba is revolutionising online grocery by positioning itself as a fast, upscale alternative to normal supermarkets. The Amazon approach with this Whole Foods pilot bears some resemblance. Whole Foods stores are in dense urban areas, and are in close proximity to their clientele who have more income and a taste for organic, healthier food choices. Soon enough, we can see a change in the retail market as Amazon starts delivering groceries at our doorsteps. By this, it will move into the physical world and not remain restricted to online shopping.