Online retailer Flipkart is reportedly planning its foray into the food retail business by opening brick and mortar grocery stores in India.
According to the rules, 100 percent FDI is allowed in the food retail sector even as foreign investors are not allowed in the retail space. Flipkart, 77 percent of whose stakes are owned by Walmart, is looking to tap into the offline store market, a report in The Times of India said.
"Globally, around 50-60 percent of Walmart's sales come from food. The strategy of opening offline stores falls into Walmart's overall scheme of things," the report said, quoting a source.
The report, however, says that a Flipkart spokesperson chose not to respond to the development.
The food retail business, which constitutes two-thirds of India’s entire retail space, is witnessing intense competition, the report said. Walmart’s rival Amazon is investing $500 million to buy stakes in More, Aditya Birla Group’s food and grocery retail chain and that of Kishore Biyani-led Future Retail.
Other players like Grofers, Big Basket and Mukesh Ambani-led Reliance Retail are also in the fray, as the food retail sector is expected to expand to $800 billion in the next four years, the report said.
(With inputs from The Times of India)
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