by Apparel Resources News-Desk
14-August-2019 | 2 mins read
Amazon.com is in the last stage of talks to buy a 10 per cent stake in India’s second largest retailer by revenue, Future Retail Ltd.
This is another move by Amazon to secure a foothold in the bricks-and-mortar retail industry in India which is the world’s fastest growing retail market.
Future Retail is seeking a valuation of US $ 281 million for the 10 per cent stake which will likely be sold through a holding company, giving Amazon the option to buy more shares.
Household and home-delivered fresh produce are growing markets in India, and the Group’s retail chain Big Bazaar will help provide Amazon the gateway into these markets in India. Prior to this, the e-commerce giant had bought Whole Foods Market Inc. for US $ 13.7 billion in 2017, strengthening their food retail segment in the US.
The deal has still not be finalised and could fall through or be delayed.
The acquisition will tighten the competition between Amazon and Walmart as well as the planned e-commerce venture by Mukesh Ambani which plans to combine online and offline retail in India.
This is the last sizeable market left to capture after the company’s failure in China. Walmart acquired homegrown e-tailer Flipkart for US $ 16 billion last year and has set up a local unit that is allowed to sell goods to smaller grocery stores but not directly to consumers.
Amazon has been acquiring tiny stakes in other Indian bricks-and-mortar chains such as Shoppers Stop Ltd. and a grocery chain from the Aditya Birla Group in the past couple of years.
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