E-commerce giant Flipkart said to re-apply for food retail licence in India

FILE PHOTO: The logo of Flipkart is seen on the company's office in Bengaluru, India, May 9, 2018. REUTERS/Abhishek N. Chinnappa/File photo

Indian e-commerce giant Flipkart has decided to re-apply for a food retail licence in the country after its initial proposal was rejected last week.

The development was first reported by Reuters.

While the Indian government currently allows 100 per cent foreign direct investment (FDI) in food retail, media reports said the Department for Promotion of Industry and Internal Trade (DPIIT) turned down Flipkart’s proposal to enter the sector citing a regulatory issue.

It, however, did not elaborate on its reason.

DPIIT is a part of India’s Ministry of Commerce and Industry and is responsible for creating and implementing government policy and strategies for industrial development.

Last year, Flipkart had evinced interest in selling food products through online and mobile platforms and had sought government approval for it. The company had also set up a new local entity, Flipkart Farmermart, for the business, per a PTI report.

The rejection last week came as a big blow to retail giant Walmart that owns a majority stake in the Bangalore-headquartered firm. The former acquired a 77 per cent controlling stake in Flipkart for a whopping $16 billion in 2018.

Flipkart’s arch-rival, US-headquartered Amazon, had received the government’s approval to retail food products in India in 2017. Local startups Zomato and Grofers, too, have secured approval to enter the food retail business.

Within the food retail segment, the grocery segment is currently witnessing increased traction amid the COVID-19 pandemic. The sector, say experts, could witness significant consolidation and fundraising going forward.

The contours of the sector have changed over the past few months as people have flocked to the online market to source essential supplies such as groceries.

Recently, BigBasket made headlines for its plan to raise around $150-200 million. Online retailer Paytm Mall, too, has reportedly initiated talks with e-grocery startup Grofers for a potential investment.

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.