Both companies have been in talks for 9.5% stake sale since last year
Big Bazaar will be one of the preferred partners for Amazon grocery vertical
The companies met several times over the last year to explore joint business plans
Kishore Biyani-led Future Group has now begun listing nearly all of its brands on Amazon across verticals such as fashion, grocery and electronics. This move can be seen as a precursor to the upcoming stake sale deal between the companies.
Both companies have been in talks since last year to align their businesses together through a stake deal. According to an ET report, Amazon and Future Group have met several times over the last month to explore joint business plans about distribution, warehousing and creating special products for Amazon’s marketplace and its grocery offerings Pantry and Amazon Now.
The sources also added that Future Group-owned Big Bazaar will become one of the preferred sellers under the grocery vertical in Amazon India.
While talks of a deal had to take a back seat after the implementation of the new foreign direct investment-related rules for ecommerce marketplaces, the companies are now moving closer to finalising a deal.
Amazon-Future In Discussions Since Last January
The talks of Amazon buying a stake in Future first emerged in January when Future Group founder and CEO Kishore Biyani met Amazon founder Jeff Bezos at the latter’s Seattle headquarters.
In May 2018, it was reported that Amazon had begun talks with Future Retail to acquire 9.5% stake. In November 2018, another report showed that Amazon was discussing a wider agreement with the Indian retail conglomerate.
However, the discussions slowed down after the government implement the FDI changes in ecommerce on Feb 1. Amazon had reportedly suspended its plans to acquire a stake in Future Group at the time. It was also reconsidering its deal to buy a stake in Aditya Birla Group’s grocery supermarket chain, More. However, at the time, in response to Inc42’s query, Amazon claimed the reports were mere speculation.
Towards the end of February this year, Amazon was in the final stages of talks to get a stake in Future Coupons, a coupon provider owned by Future Group. The move was to ensure that Amazon is in compliance with the new FDI policies under which it cannot have a majority stake in its sellers.
Amazon Targets Future Group’s Wide Presence
Future Retail is the flagship company of Future Group. According to the company, it has a presence in over 250 cities across the country through over 12 Mn square feet of retail space.
Currently, it runs around 1,600 stores across food, grocery and general merchandise.
The retail group operates multiple retail formats in both the hypermarket, supermarket and home segments of the Indian consumer market including brands such as Big Bazaar, EasyDay Club, ezone, and fbb.
Apart from this, Biyani’s Future Group is also looking to foray into the ecommerce segment with its own online-offline hybrid model. The group launched a website for its fashion retail discount chain Brand Factory this year. This is the company’s second attempt to enter the ecommerce space.
In 2017, Future Group had to shut down the operations of its online furniture store, FabFurnish, which it had acquired from a Germany-based internet company Rocket Internet.
Due to heavy losses, the group was forced to close FabFurnish. However, Biyani said that the losses were “compensated” as they learnt from the experience.
