Amazon May Acquire 10% Stake In Future Retail; Will Walmart & Paytm Lose The Race?

Although Amazon has lost the race to acquire Flipkart, and become India’s largest e-commerce portal; they are not defeated yet.

Insider sources have claimed that Amazon, along with Paytm and Walmart are in an interesting race to buy a minority stake in leading offline retail brand Future Retail, owned by Retail King of India: Kishore Biyani.

If we believe FactorDaily’s exclusive report, then Amazon can be the eventual winner this time.

Is this the start of an offline retail battle in India?

Amazon, Paytm, Walmart: Who Will Win?

We had been reporting on this news since long: In the month of February this year, we had reported that Future Group is in talks with Amazon and Alibaba for a ‘strategic partnership’, which translates into a financial investment in exchange for some equity.

Now, FactorDaily has come up with a report, that Amazon has almost clinched the deal, and this way, they can beat Walmart and Paytm in this race.

If we believe the reports, then Future Retail can be valued at $6 billion, which is Rs. 40,872 crore; and Amazon may end up paying $500-600 million to acquire 10% stake in the venture.

Future Retail has a market capitalization of $4 billion as of now and is listed on the stock exchange as well.

Why Is Amazon Interested In Future Retail?

Last year, Amazon had bought a stake in Shoppers Stop, and the objective was the same: they want to make inroads into the lucrative grocery market in India, which is valued at approximately Rs 30 lakh crore; and only 3-5% of that has converted into online.

We all know Amazon’s aggressive plans regarding online grocery, and with their interest in Future Retail, and partnership with Shoppers Stop, it is now clear that they wish to unleash a mixture of online and offline retail model in India.

Advantage: Future Retail

The biggest advantage which Future Retail brings to the table is their consolidation activity, and massive supply chain network, across India.

Recently, they have consolidated Nilgiris, HyperCity, and Aadhaar from Godrej Group into one, which makes them as an attractive investment to leap into the organized retail sector in India.

Besides Reliance Retail and D-Mart, Future Retail is the only big name left now, and Amazon (or Walmart or Paytm) will happily invest in them to make their own position stronger.

Besides, Future Retail covers 11,228 PIN Codes in India using hubs and branches model, and have 46 distribution centres, which also includes 4 temperature controlled hubs, for pan-India supply and logistics.

Besides, they also have 68 in-house brands.

Amazon would only be too happy to place a bet with Future Retail, and make some solid inroads into the grocery and organized retail market of India.

We will keep you updated.