Amazon's India unit has increased the authorized share capital of its food retail business -- Amazon Retail India to Rs 355.5 crore from Rs 165.5 crore to take on incumbent players including SoftBank-backed Grofers, Bigbasket, and Flipkart's Supermart.
Seven weeks after the government introduced revised FDI norms for e-commerce marketplaces, which saw India’s leading e-commerce player Amazon pulling down it entire inventory including its food and grocery business only to be back in a little over three weeks since February 1, the company is doubling down on its food retail business — Amazon Retail India — and take on other players including SoftBank-backed Grofers, Bigbasket, and arch-rival Flipkart’s Supermart.
World’s largest online retailer — Amazon’s India unit has increased the authorized share capital of Amazon Retail India to Rs 355.5 crore from Rs 165.5 crore, said Amazon Retail India’s regulatory filing sourced by business signals platform Paper.vc.
With the increase, the number of its equity share has shot up from 165 million to 355 million of Rs 10 each. The decision was taken earlier this month in an ‘extra-ordinary’ general meeting of the shareholders of Amazon Retail India, the documents showed.
Amazon India had invested Rs 10.5 crore in Amazon Retail last year as well. The company had reportedly committed up to $500 million in the food retail arm to sell local food products through online and offline platform. Online, Amazon Retail is among the vendors on its grocery platform Amazon Pantry.
In 2016, the government had allowed 100 per cent FDI in food retail through offline or online channels.
While Flipkart had reportedly planned $264 million investment in Supermart in August last year, Grofers earlier this month had raised $60 million in fresh funding led by SoftBank taking its total fundraising to $300 million, as per deals tracker Crunchbase.
However compared with Bigbasket launched in 2011, the oldest leading grocery player, Grofers has a lot of catching up to do.
Bigbasket has added more than Rs 1,000 crore in revenue in FY18 to Rs 1,605 crore from Rs 580 crore in FY16 vis-a-vis merely around Rs 40 crore added by Grofers to its FY16 revenue of Rs 14.3 crore to take it to Rs 53.5 crore mark in FY18, showed regulatory filings source by Paper.vc.
Interestingly, despite the massive gap between the revenues of two startups, started almost around the same time, Bigbasket has managed to contain its losses to Rs 310 crore in FY18. This is quite comparable to Rs 258 crore losses posted by Grofers in the same fiscal year.