The governments of West Bengal and Odisha have approved a plan for Flipkart customers to purchase liquor through HipBar, an Indian alcohol home delivery app, sources told the news service.
The platform is owned by Diageo PLC, a global alcoholic beverages company headquartered in London that calls itself the world’s largest producer of spirits and a major producer of beer and wine.
Under the arrangement, Flipkart customers will be able to place orders for their favorite drinks, which HipBar will then deliver after collecting products from retail outlets, according to a source.
The deal between the two retail giants comes as India’s alcohol market has been valued at $27 billion, according to IWSR Drinks Market Analysis, the London-based source of data and analysis on the global beverage alcohol sector.
Neither Diageo India nor Flipkart responded to a request for comment.
In June, Reuters reported that Amazon received approval to deliver alcohol in West Bengal, signaling its entree into the sector. “Flipkart wants to make sure that whatever consumers want, they get it,” a source told Reuters. “The margins (on liquor) may be low, but for Flipkart, it is about stickiness, so consumers don’t have to go anywhere else.”
As PYMNTS reported, Amazon was not the only online company to be approved for liquor sales. BigBasket, which calls itself India’s largest online food and grocery store, also got the green light. Its major investor is Alibaba Group Holding Ltd., the Chinese global technology company.
Last month, Swiggy and Zomato, India’s two major food delivery startups, added liquor to their product offering after they got approval from the state. The companies aim to profit on the high demand for liquor from people staying at home due to the COVID-19 pandemic.
Earlier this year, Amazon and Flipkart opposed a new Indian tax on the eCommerce market, saying it would cool growth in the industry. The tax, which was implemented in April, is 1 percent on each sale made by a seller on the eCommerce platforms. It is part of a bigger plan by Indian Prime Minister Narendra Modi to boost revenues from taxes to balance weaker customer demand in the country.