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Amazon strengthens partnership with India’s Future Retail by co-hosting shopping fest

Future Group’s flagship Republic Day sales will be available on Amazon for the first time.

Idle spaces in shopping malls haven't been fully tapped into. Image credit to 123rf.com.cn

At a time when Reliance Retail has marked its entry into India’s almost USD 30 billion e-commerce market, American e-tailer Amazon is expanding its partnership with Indian conglomerate Future Group, which operates large retail chains such as Big Bazaar, Food Bazaar, Nilgiris, Hypercity, and Easyday.

Future Group’s 14-year-old Indian Republic day sales—touted as Sabse Sasta Din (the cheapest day), will be for the first time featured on Amazon India this year, local media Economic Times reported citing sources. The shopping festival hosted by Big Bazaar every year around January 26, is a five-day-long affair.

Future Group’s Republic Day sales event seems to be the start of a stronger alliance between the two giants. Although the group already sells its private brands and other products ranging from food and fashion to furniture on Amazon, all Future Group discount events will also be now celebrated on Amazon, according to the ET report.

“All Future Group big properties (discount events) will also be celebrated on Amazon,” the report said citing sources, adding this is the first time that the ‘Sabse Saste’ sales will happen outside of Future Group’s stable.”

Amazon’s partnership with Future Group implies the US e-commerce giant’s ambitions to get deeper into soon-to-be USD 10 billion online grocery market.  The Seattle-headquartered company is seeking to leverage the offline retail network of Future Retail to expand its hyperlocal service Amazon Now across India. Currently, Amazon has an arrangement with Big Bazaar outlets for pickup and delivery of groceries to consumers purchasing through its online supermarket Amazon Pantry. Amazon India also plans to sell Future Group’s FMCG and fashion private brands through its e-commerce marketplace.

Amazon had acquired a 49% stake in Future Coupons, a group entity of the conglomerate, which owns 7.3% of Future Group’s retail venture, Future Retail. The arrangement gives Amazon India a stake of about 3.6% in Future Retail, which has a network of more than 1500 stores of various formats. In November 2019, the INR 1500 crore (USD 210 million) worth deal was approved by the Indian regulator Competition Commission of India (CCI).

Sabse Sasta Din is one of the many Future Group’s shopping events that the two giants are jointly planning. Last month, Kishore Biyani, founder and chief executive officer of Future Group reportedly said he expects USD 1 billion of incremental revenue from Future Group’s association with Amazon India over the next two to three years.

“The Amazon partnership that rolls out now will build upon this in gaining new business and customers without additional costs or capex,” he had said, according to the ET report. “We believe we can create around a billion dollars of additional new business from the Amazon partnership alone in the next 24-36 months.”

According to a recent report by the consulting firm RedSeer, India’s retail market would touch USD 1 trillion by 2020, of which modern retail will contribute USD 118 billion and online retail will be USD 46 billion or  4.6% of the total market. By 2023, online retail is expected to touch USD 86 billion, while total retail opportunity will cross USD 1.3 trillion.

The battle to get a bigger pie of India’s rapidly growing e-commerce and e-grocery market is set to further intensify this year as the behemoths such as Amazon, Walmart-owned Flipkart, and Reliance Retail, lock horns.

Last week, Reliance Retail rolled out its e-commerce platform JioMart in Mumbai after a year of planning and preparation to sell groceries, staples, and other household products such as shampoos and soaps to users of Jio, its telecom service. JioMart will reportedly let users order from 50,000 grocery products without any minimum order restrictions. Meanwhile, Walmart has been expanding its footprint in the Indian online grocery market through Flipkart’s venture Supermart, launched in 2018.