Amazon increases its traction in India as its expands further into the groceries market

Last week, Jeff Bezos, Amazon’s founder and CEO told shareholders in a letter that Amazon India is its fastest growing marketplace: in its first year of Amazon Prime, Amazon added more members in India than any other location in Amazon’s history.

Amazon expects to its household products and groceries business to account for more than 50% of its business in India in the next 5 years, as its improves its traction in the fresh produce market.

As per Amit Agarwal, head of Amazon India, cleaning products, creams and soaps are already the largest product category, terms of number of units sold in Amazon India.

“I would not speculate on when we would launch AmazonFresh but, absolutely, if you ask me the next five years of vision – from your avocados to your potatoes, and your meat to your ice cream – we’ll deliver everything to you in two hours,” said Agarwal.

In India, Amazon is rapidly expanding its grocery offerings through its service named Pantry and has tied up with local vendors in four cities for Amazon Now, promising two-hour deliveries.

“Probably in the next five years groceries and consumables would be more than half of our business,” said Agarwal.

India, is’s largest active customer base outside of the U.S., said Agarwal.

According to analysts at Morgan Stanley, India’s e-commerce market is tipped to grow to $200 billion in the next 10 years. Cheap mobile data has made online shopping very accessible to consumers. With a base of over 100 million registered users Amazon India is looking to cash-in on this growing opportunity.

“We want to get the next hundred million customers shopping with us,” said Agarwal, adding that Amazon plans to woo new clients with product exchange and staggered payment offerings.

Closing on on Amazon’s heel is U.S. retail giant Walmart, which is intent on purchasing a controlling stake in India’s e-commerce giant Flipkart which has the backing of Microsoft, SoftBank and Tencent.

“I feel extremely excited that e-commerce is attracting so much funding,” said Agarwal. “Otherwise, we’d have been wrong in going about it in such as big way.”

The $5 billion Amazon’s Bezos has committed to investing in the country underscores Amazon’s intent on investing in India to achieve its goal.

“Our ambition is so big it would be futile for us to think about anything other than to ensure we keep investing to bring the next 100 million customers online,” said Agarwal.


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