Daily Management Review

Amazon Enters Alcohol Delivery Industry In A Key India State, Could Soon Be The Norm For The Country


Amazon Enters Alcohol Delivery Industry In A Key India State, Could Soon Be The Norm For The Country
Amazon could soon be delivering alcohol to customers in India.
The largest e-commerce platform in the world has already secured clearance to deliver alcohol in West Bengal, a state in the Eastern region of the country according to a report by Reuters. This signals the first foray of the United States based e-commerce platform into the multi-billion-dollar alcohol business of India.
Amazon was among the companies found to be eligible for registration with authorities, said the West Bengal State Beverages Corp, the authorized agency to carry out online retail of liquor trade in the state, in a notice published on Friday.
The notice also said that Indian grocery venture BigBasket, backed by finance from China’s Alibaba, has also been selected for the same purpose in the state.
With a population of more than 90 million people, West Bengal is the fourth most populous state in India.
The notice also said that an invitation to sign a memorandum of understanding with the state government has been sent to Amazon. There had not been any previous reports of any e-commerce or delivery company getting into or being allowed to deliver alcohol in India even though some regional government in India had allowed online delivery to individual retailers selling alcohol.  
There were no comments available from Amazon or from BigBasket about the new development.
According to estimates by IWSR Drinks Market Analysis, the move by Amazon to venture into the alcohol delivery market, which does not actually exist in the country to any notable degree, is a bold as well as a lucrative one because the Indian alcohol market is worth a total of $27.2 billion.
With the spread of smartphone based internet usage and a growing trend among people to buy products online - from groceries to electronics, Amazon has expanded its e-commerce operations in India over the last few years making heavy investments. Amazon has identified India to be one of its key growth markets and has already committed investments of $6.5 billion in the market.
Last month, during the last phase of the nationwide lockdown in India in response to prevent the spread of e novel coronavirus pandemic, delivery of alcohol was started by the country’s top two food-delivery startups, Swiggy and Zomato, in some selected cities of the country. This was done in anticipation of the high demand for booze with many of the states slowly relaxing the tough lockdown measures that had been in place for more than two months at a stretch.
Sale of liquor was prevented during the two months of the lockdown, which started in the fourth week of March, by the Indian government all throughout the country. But with retail liquor shops opening in some parts of the country in May, there were long serpentine queues of customer at the liquor stores. There has also been intense lobbying with different government by the liquor industry to allow for online deliveries in many states of the country.
Setting alcohol policies are under the purview of the regional or state government in India. Last month, the government of the Eastern Indian state of West Bengal had invited sought invitation from companies to express interest for “handling electronic ordering, purchase, sale and home delivery of alcoholic liquors from licensed retail outlets” to eligible legal-age consumers in the state.
The selection of Amazon and BigBasket is the culmination of that process.