Future Retail Eyes Wider Customer Base With Long-Term Agreement With Amazon

After more than two years of speculation, the Competition Commission of India (CCI) finally gave approval to Amazon in November 2019 to buy equity shares for approximately 49% stake in Future Coupon Limited (FCL).

Now, Future Retail Limited (FRL), which is part of FCL, and Amazon India have entered into long-term business agreements for expanding the reach of FRL stores and consumer brands through the Amazon India marketplace. According to press statement, this arrangement will build on the robust offline and online capabilities of both organizations creating significant value for customers.

Future Group’s Republic Day ‘Sabse Saste Din’ sale will also feature on Amazon. The Future Group will deliver products ordered on Amazon’s web store through its network of outlets and warehouses. This is the first time ‘Sabse Saste’ sales, a big discounting event for the Future Group will happen outside of Future Group’s table.

According to the agreement, Amazon India will become the authorised online sales channel for FRL stores and FRL will ensure the participation of relevant FRL stores on the Amazon India marketplace, and its programmes. FRL and Amazon India signed two agreements focusing on key categories namely grocery and general merchandise and fashion and footwear.

“Amazon and Future Retail share common values of serving customers everywhere in the best possible manner,” said Kishore Biyani, Chairman and Managing Director, Future Retail Limited. “This arrangement will allow us to build upon each other’s strengths in the physical and digital space so that customers benefit from the best services, products, assortment and price,” he added.

While Amazon will help FRL reach a wider customer base, FRL will augment existing store-infrastructure at its retail outlets for facilitating packaging and pickup of products ordered online. FRL and Amazon India have launched this service across 22 stores till now.

“FRL’s national footprint of stores offering thousands of products across fashion, appliances, home, kitchen and grocery will now be available to millions of customers shopping on Amazon.in, in hours across 25+ cities,” said Amit Agarwal, SVP & Country Head, Amazon India.

FRL will list on the Amazon Prime Now programme in Delhi, Mumbai, Bengaluru, and Hyderabad. This will allow customers to get food, grocery and general merchandise delivery within two hours FRL plans to soon list stores like Big Bazaar, and Foodhall in more cities on the Amazon India marketplace.

Biyani had said that the investment in the firm is not just to raise money but also to become a part of the ecosystem. “We have a database of 8 Bn transactions and 55 Mn customers. Payments is one platform where we can acquire the customer base. And if the customer starts using your payment mechanism then the loyalty factor increases. So it’s getting into the ecosystem,” Biyani said during the acquisition.

Future Retail owns and operates brands including BigBazaar, EasyDay, and Nilgiris. The company serves in 400 cities with over 1500 stores that cover over 16 Mn square feet of retail space.

Biyani has also been showing support to the online marketplaces in the tiff between ecommerce companies and small merchants. Biyani said that online and offline retail, especially small stores, are different models altogether and that the corner shop will not vanish because “convenience and contingency buying will always be there”.