Online giant Amazon’s efforts to spread its presence in the offline retail sector in India may get another boost if one goes by the reports of its investing in Future Retail, the Kishore Biyani-led retail chain more popularly known for its Big Bazaar outlets. Amazon is reportedly acquiring a 10% stake in Future Retail. While this has not yet been officially confirmed by either Amazon or Future Group, sources tell TNM that the deal should be closed in another 10 days. Talks between Amazon and Future Group have been ongoing for over six months now.
Amazon already has a minor interest in two other Indian ventures, Shoppers Stop and More. The association with Future Retail, however, may offer a much wider reach for the US company than the other two. The reasons are not far to seek. Apart from the thousands of stores that Big Bazaar operates throughout the country, there are other stores like Easyday, Foodhall, HyperCity, FBB, Heritage fresh, ezone and WH Smith, which belong to the group. Some of them are in the hypermarket category as well.
The promoter group holds around 47% in Future Retail and details like the valuation of the company and how much Amazon will pay to gain a 10% stake etc. will emerge later.
According to a PTI report, one of the reasons for the talks between Amazon and Future Retail being delayed was the move by the Indian government to tighten the norms under which the foreign ecommerce players operate in India. There have been clarifications on the FDI norms for online retail, which directly impacted the manner in which Amazon and the rival Flipkart were operating. The Rs 179.26 crore investment in Shoppers Stop was made by Amazon.com Investment Holdings LLC in exchange for which the Indian offline retail group allotted equity shares which would amount to around 5%.
The investment in More supermarket chain earlier owned by the Aditya Birla Group was more indirect.
With inputs from Shilpa Ranipeta