Amazon is said to be eyeing a share of the India’s offline retail
Amazon was earlier in talks with another offline retail chain, Future Group
Reliance was reported to have a turnover of over 100K Cr in FY2019
Global ecommerce giant Amazon is reportedly in talks to acquire about 26% stake in the retail arm of the Indian conglomerate, Reliance.
According to media reports which two cited senior industry executives, these investment talks have started after Reliance’s deal with the Chinese ecommerce giant Alibaba did not complete because of differences over the company’s valuation.
Amazon is said to be looking to get a piece of India’s offline commerce market and was earlier also reported to be in joint-business talks with another offline retail chain brand, Future Group.
However, the American ecommerce major is said to be cautious of its investment size, as it does not want to operate in violation of India’s new FDI in ecommerce guidelines. The new guidelines prohibits ecommerce marketplaces from owning more than 25% stake in their sellers.
In response to an Inc42 query, Amazon said that it does not comment on what it may or may not do in future.
Further, Reliance Industries Ltd is looking to reduce its outstanding debt of $41.8 Bn, through a deal with a global retailer or strategic investor. “Reliance too is keen in case valuations match. Both sides have realised it is better to collaborate rather than fight,” an executive reportedly said.
According to the latest company announcement, Reliance Retail has a turnover of over 100K Cr in FY2019 and has more than 10K stores across India. The company attributed this growth in revenue to be primarily driven by aggressive store addition and spurt in same-store sales.
The company claimed to be growing at a rate of nearly 10 stores per day in the last two years. Reliance Retail is said to have added a total of 2.8K stores to its tally during FY 2018-19. As on March 31, 2019, Reliance Retail recorded 10,415 operational retail stores in over 6.6K Indian towns and cities.
Earlier in July, Reliance Retail has started the pilot phase of its new commerce initiative — hybrid online-offline commerce. The differentiated business model will provide a technology platform for millions of small merchants across India to strengthen and grow their business, the company added.
In 2018, Reliance had announced its foray into the ecommerce space with a hybrid online-offline model. Under this plan, the company had claimed to bring together 350 Mn customer footfalls at Reliance Retail stores, 307 Mn Jio connectivity customers and 30 Mn small merchants all over India who provide the last-mile physical market connectivity.
Later, Reliance Retail was also reportedly planning to use over 5.1K Jio point stores located across 5K cities and towns as delivery and collection points for its ecommerce venture.
While speaking at the 41st annual general meeting (AGM) last year, Reliance chairman Mukesh Ambani had also said that Reliance Retail will have a bigger opportunity in the ecommerce market by creating a hybrid online-offline model.
“Our new commerce platform will redefine retail in India by enabling all customers ─ rich or poor, whether at home or on mobile ─ to transition from simple shopping to personalised Immersive shopping experience,” he added.
