Amazon expands its online grocery business to India

Key Points
  • Amazon is expanding its online grocery business Amazon Fresh in India, the company announced Thursday.
  • The expansion news comes one day after the company announced its new campus in India's southern city of Hyderabad.
  • The company has made significant investments in the region despite local regulations that have created obstacles to its growth.
Amazon Founder and CEO Jeff Bezos
Mark Ralston | AFP | Getty Images

Amazon is expanding its online grocery business to India as part of its plans for the fast-growing market, the company announced Thursday.

Amazon Fresh will be available to customers in some parts of Bengaluru through its main India website and app, the company said, and it will later be rolled out to other cities. The service will deliver groceries within two hours between 6 a.m. and midnight, according to a press release.

The move comes one day after Amazon launched its biggest campus in the world in Hyderabad, India, according to Reuters. The campus will serve as an outpost for 15,000 employees and sprawl over 9.5 acres, Reuters reported, saying the company currently has 62,000 employees in the country.

Amazon has already invested heavily in India, with hundreds of open positions listed in the region as of January, including in its retail and marketplace divisions. The company has invested roughly $5 billion in the first five years of its business there, according to BloombergQuint. Last year, CNBC affiliate CNBC TV-18 reported the company is set to invest another $2 billion in the country.

While India's large population represents a huge opportunity for Amazon, local regulations could also slow down its growth in the region. India's new e-commerce law came into effect in February, banning companies like Amazon and its local competitor Flipkart from selling products from companies in which they have an equity stake. Analysts estimated the rules would have a short-term impact on the e-commerce companies while they build new models to comply with the rules.

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