Amazon, pitted in a battle against Walmart-owned Flipkart in India's e-commerce market, is in talks with Mukesh Ambani-led Reliance Retail to buy 26 per cent stake in the country's biggest brick-and-mortar retailer, reported the Economic Times. Amazon is drawn to Reliance Retail’s market-leading position in consumer electronics and mobile phones, the report further said.
Amazon also eyes Reliance Retails's wide network of grocery stores that "could potentially act as fulfilment points" for the Seattle-based food and grocery play in the long run. The report also added that e-commerce behemoth is looking to acquire a stake that is less than 26 per cent so that Reliance Retail can become a seller on its Indian marketplace.
As per the revised FDI norms, no seller should be more than 26 per cent owned by the platform as it will then be deemed a group company and barred.
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Amazon's move comes in the backdrop of its archrival Flipkart mulling to improve its offline presence in the country. Reportedly, the Walmart-controlled online retailer is planning to open brick-and-mortar stores in India to sell food items.
It is to be noted that Amazon has committed an investment of $500 million in food retail—both online and offline—through its food retail arm Amazon Retail India. The company has also bought a large stake in Aditya Birla Group’s food and grocery retail chain, More. In addition, Amazon was also looking to acquire a stake in Kishore Biyani-led Future Retail, which runs Easy Day and Big Bazaar chain of stores in India.
For Reliance Retail, Amazon could be a prospective partner after its talks with China’s Alibaba Group to sell a stake in the retail entity fell through due to differences over valuation.