Amazon Acquires Stake In Shoppers Stop! Exciting Possibilities For You
This acquisition has worked wonders for Shoppers Stop's stock!
This is a huge development – both for the Indian retail industry, and for e-commerce industry.
28-year old Fashion retail company Shoppers Stop, which is backed by K Raheja Corp Group has decided to sell 5% stake in the company to Amazon, for Rs 179 crore.
Now, this is for the first time that Amazon’s investment arm has invested in an offline fashion retail outlet in India.
And, this is one of the rare occasions, when an established Indian retail company decided to offload their stake to an online ecommerce company.
We derive few possible reasons, and attempt to visualize what can be the possibilities with this acquisition.
Amazon-Shoppers Stop Partnership?
Amazon.com NV Investments Holdings LLC, which is registered as category III Foreign Portfolio Investor with SEBI in India; and liability company incorporated in the US has decided to invest Rs 179.25 crore or $27.6 million, for acquiring 5% stake in Shoppers Stop.
The Board of directors from Shoppers Stop has agreed in principle to this investment, and offloading of stake to Amazon; however, an extraordinary general meeting has been proposed on October 18th, as per filing on Indian stock exchange BSE, for seeking approval of this deal.
In a statement, Amazon has confirmed this news, as they expressed confidence in Indian retail sector, describing it as “under penetrated and highly unorganized. We see a big potential in Shoppers Stop to disrupt this segment and want to be part of their growth story.”
Share Market Cheers This Partnership
Investors and the share market has given a green signal to this unusual and rare partnership between an ecommerce giant, and a retail company from India.
Share prices of Shoppers Stop increased by 20%, which is the highest since 2015.
On Monday morning, the shares of Shoppers Stop was trading at Rs 483.90, which is 16.20% up compared to Friday’s share price.
What Are The Possibilities Now?
Shoppers Stop has 83 stores across 38 Indian cities, and have 14,000+ employees.
And Amazon is India’s second largest, and world’s largest ecommerce portal.
Now, there are so many possibilities of this partnership.
To start with, Shoppers Stop will now showcase their private label brands on Amazon, and finally, will be able to kickstart their online sales channel. Last week, Shoppers Stop and Amazon India had already signed a deal, under which Shoppers Stop will sell more than 400 products across categories such as apparel, footwear, handbags and more, on Amazon.
Besides, as per some analysts, Amazon can enable quick online shopping right at the Shoppers Stop outlets, and also use the retail outlets for deliveries of the products ordered online.
Maybe such partnerships between ecommerce and offline retailers is the future of the industry.
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