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Shoppers Stop To Get Back On Through Its Subsidiary

Shoppers Stop To Get Back On Through Its Subsidiary

New FDI policy had barred Amazon from listing Shoppers Stop products

In 2017, Amazon had bought a 5% stake in Shoppers Stop

Online sales account for 1.7% of Shoppers Stop's total sales

To gain back in the ecommerce game after the changes in the rules for marketplaces with FDI, Shoppers Stop is using its subsidiary, to relist products on Amazon. Three months earlier Shoppers Stop had to delist itself from Amazon because of the new FDI policy, which barred marketplaces from controlling inventory.

In 2017, when Amazon picked up 5% stake in Shoppers Stop, little did it know that two years later it would have to delist Shoppers Stop from its platform because of the new FDI policy. The rules barred ecommerce marketplaces from listing products of those companies in which they have a stake. being a completely separate legal entity has no stake from Amazon, thus enabling India oldest departmental store, Shoppers Stop, to get back on Amazon.

Rajiv Suri, managing director and CEO of Shoppers Stop told Business Standard that Shoppers Stop’s website will get listed on Amazon complying with all the regulatory requirements and almost 120 stock keeping units (SKUs) would be available in the forthcoming days and will be scaled up over time. Suri told Economic Times that the company’s full stock should be back online in a few weeks, with more products coming in the next few days.

Shoppers Stop Online Sales Impacted

The delisting of Shoppers Stop’s ecommerce business from Amazon had impacted the revenue from its online sales channel. In the fourth quarter of FY19, the company’s online sales grew 10% when compared to the same period last year i.e Q4 2018. Online sales account for 1.7% of Shoppers Stop’s total sales, the company said.

Amazon and Shoppers Stop are also looking towards other ways of working together with six Amazon kiosks already functional in some Shoppers Stop stores. Shoppers Stop in return gets to use Amazon’s vast network to widen its online presence.

Shoppers Stop posted sales growth of 5% this week with a revenue of INR 1044 Cr. It reported same-store growth at 3.7% for the Jan-March quarter as compared to a negative growth of 4.1% reported a year ago. While metro cities saw erratic growth for the company, Tier 2 cities displayed strong sentiment towards the company.

While bringing back its products to Amazon, Shoppers Stop will also reduce discounting and look to achieve more profitability by listing products closer to the full price tag.

FDI Rules Disrupt Amazon Business

After the new ecommerce policy took effect in February, Amazon had to shrink down its catalogue heavily on the global store. According to an earlier report in Inc42, only 6,000 products remained on the main global store entity Amazon Exports Sales LLC as compared to 6 Mn products before February, when the FDI rules didn’t apply.

Amazon’s private label brands such as Symbol (fashion), Myx (fashion), Solimo (home and kitchen), and its Echo smart speaker lineup was also affected because of the new policy.

In February, Amazon’s shares fell by 5.38% to $1,626.23, losing $45.22 Bn in market capitalisation. Amazon also admitted that it was impacted due to the downtime in certain markets even though it was a minimal impact.