Once again, talks about a possible partnership between Amazon and Future Group has emerged, and once again, it is being speculated that Amazon will acquire 10% stake in Future Group, at a valuation of Rs 2000 crore.
What is the reason here? Is Mukesh Ambani’s ecommerce ambitions the catalyst here?
And what happened to the previous talks about Amazon and Future Group partnership?
Amazon May Acquire 10% Stake In Future Group
As per the rumors coming in from the market, Amazon is right now in talks to acquire 10% stake in Kishore Biyani owned Future Group.
Rs 2000 crore is the estimated valuation of Future Group, and this would be the base for Amazon’s investment into it.
As per two people familiar with the talks going on, the funding and the acquisition will be done via holding company, and the clause of the partnership will be inked in a way that allows Amazon to invest more, in the future.
Future Group owns some of the biggest retail brands in India, which includes Big Bazaar, Hypercity, Brand Factory, and more.
Both Amazon and Future Group have denied this speculation, but we can feel that something is cooking.
And the reason is Mukesh Ambani’s aggresive stand on ecommerce.
Mukesh Ambani Is The Catalyst For Amazon-Future Group Partnership?
Recently during the 42nd AGM, Reliance head Mukesh Ambani declared their ecommerce ambitions, and gave us a hint about their plans.
Terming ecommerce as a $700 billion business opportunity, Ambani said that 3 crore+ kirana store owners across India will be connected via their new ecommerce channel, which will allow users to order via their Jio phones, and pay using Jio wallet.
He said, “This user friendly digital platform is designed for inventory management, customer relationship management, financial services and other services,”
We have already reported how the new ecommerce app from Reliance is being tested in Mumbai right now, and Gujarat can be the first state where it is launched, full-fledged.
Infact, Reliance aims to develop the world’s biggest O2O or Offline to Online business model, via their new ecommerce platform.
Not only Amazon, but Flipkart and Paytm too should be worried.
Amazon’s Food Retail Adventure In India Intensifies
Last year, Amazon tried very hard to acquire 10% stake in Future Retail, but the talks failed due to complicated FDI issues.
Infact, not only Amazon, but Walmart, Google and even Paytm were interested to grab a pie from Future Group.
This is very clear that if Amazon gets into the camp of Future Group, then their offline expansion will get a massive boost.
Future Retail owns and operates 2000 stores across 400 Indian cities, and if Amazon wants to become a market leader in food and grocery business, then Future Group holds the key.
We will keep you updated.
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