Chennai: The Indian e-commerce scenario is set to hot up with Mukesh Ambani and Jeff Bezos’ firms teaming up if reports are to be believed.
Amazon.com Inc is in talks with Reliance Industries’ retail unit to buy a stake in India’s biggest brick-and-mortar retailer, two sources with knowledge of the talks told Reuters on Friday.
Amazon’s online presence could help bolster Reliance’s consumer and private labels business and more importantly, a potential partnership will help the duo counter Walmart, which last year invested $16 billion in Flipkart, in their battle for a bigger share of India’s e-commerce market, said the report.
In December last year, the government modified rules around foreign direct investment (FDI) in e-commerce, creating additional hurdles for companies such as Amazon and Flipkart. This in turn gave Reliance and similar firms an edge.
Amazon had made the proposal to Reliance for the partnership, but it was not clear whether a deal would materialise, said one of the sources, according to the report.
The second source said Amazon had been pondering a proposal to purchase up to 26 per cent stake in the Reliance unit since at least February.
“For Amazon, it is about neutralizing a major rival and allowing itself to grow,” said the second source, who added the company envisions helping Reliance’s roughly 40 brands and grocery products go online, stated the report.
The development would mean Reliance will be able to leverage Amazon’s global experience in technology, supply chain and logistics as it aims to connect grocery stores across the country digitally through its Jio telecoms network.
For Amazon, picking up a stake in a Reliance unit could mean getting access to the Jio telecoms platform and its vast retail footprint of more than 10,600 stores across India.
Reliance was previously in talks with China’s Alibaba to sell a stake in Reliance Retail, but a deal could not be sealed due to differences in valuation.
| Walmart on top |
| Walmart has been ranked top retail company in India by a study, possibly due to its acquisition of Flipkart in 2018 for $16 billion.
A Euromonitor study titled “Top 100 Retailers in Asia” said Walmart is followed by its US rival Amazon in the list. Homegrown Future Group and Reliance Retail are on the fourth and fifth places, respectively. “Many urban households are adopting more modern lifestyles, especially in big cities such as Bangalore, Mumbai, Pune, Delhi and Hyderabad,” the report said. “This behavioural change is impacting retailing in the country. Due to households’ hectic lifestyles and the busy schedules of working adults, most consumers in urban areas prefer to make their monthly purchases from modern grocery retailers instead of traditional grocery retailers,” it said. |