The battle lines for the Indian omni channel retail business may well be drawn come this Diwali as Amazon readies itself to enter the offline retail segment. While Flipkart too, has similar plans of setting shop in the brick and mortar model, Reliance will be the third entrant the plans for which the company has already broadly outlined. The three-way battle will see the average Indian customer being treated to competitive pricing and convenience shopping.
An Economic Times report states that Amazon wants to kick off its offline foray with its private label AmazonBasics. This is the US company’s global brand, which it wants to push through over 2000 retail stores. The products included within the brand include air-conditioners, vacuum cleaners, HDMI cables, batteries and cables, home necessities like bedsheets, towels, dinner plates and cutlery, and general merchandise like backpacks, umbrellas and yoga mats. Apart from these, apparel brands like Prowl and Just F owned by Amazon will also pushed through these stores. Wherever it fits, grocery and other products can be sold through the retail outlets as well.
Now this by itself is a huge range and if these are pushed through the 2000 -odd outlets of the three local companies, it can offer a stiff competition to some of the established players.
Amazon has strengthened its position in India’s offline retail market by buying into some of the leading offline retail businesses in the country. The latest investment it has made in the Kishore Biyani founded Future Group could be the game changer since there are around 1,400 Big Bazaar outlets throughout India, which can start stocking Amazon’s products. More and Shoppers Stop are the other two entities where Amazon has picked up stakes. More has 620 stores and Shoppers Stop 83.
Several issues are however bound to surface as the online giant tries to go about doing this. Margins to the retail outlets will be one such issue. Many of these retailers have developed their own private labels in many product categories. How are they likely to push Amazon’s labels in preference to their own has to be watched.