- Future Group is owned by Kishore Biyani who owns 47 percent in the group.
- E-commerce global leader Amazon is involved with Future Group Retail Ltd. for the acquisition of 8-10 percent stake in the Indian retail giant.
- Amazon already has a stake in Shoppers Stop and More owned by K Raheja Group and Aditya Birla Group respectively.
E-commerce global leader Amazon is involved with Future Retail Ltd. for the acquisition of 8-10 percent stake in the Indian retail giant. The deal is expected to close in a few weeks.
If completed, this deal will help Amazon strengthen its foothold in the Indian market where it already operates an online marketplace and will enter the offline marketplace too.
Although the talks were halted for some time because of the Indian government actions related to tightening the FDI rules for e-commerce marketplaces earlier this year.
The new regulations prevent the online marketplaces with foreign investments from selling products of the companies in which they hold ownership stakes and also bans the exclusive marketing arrangements.
Along with this, inventory of a vendor will be seen as controlled by the marketplace if over 25 percent of the vendor purchase is from the marketplace entity.
The discussions resumed some weeks ago and the final negotiations are now being carried out.
In Indian offline brick-and-mortar-retail ecosystem, this will be Amazon’s third investment. Amazon already has a stake in Shoppers Stop and More owned by K Raheja Group and Aditya Birla Group respectively.
Shoppers Stop has announced raising Rs. 179.26 crore from Amazon.com Investment Holdings LLC through an issue of equity shares which translated to just over 5 percent shareholding for the American Company
In September last year, Amazon said it has co-invested in Witzig Advisory Services, the entity which had acquired Aditya Birla Retail’s ‘More’ chain of stores in India.
Future Retail will also help Amazon compete more aggressively against Walmart-owned Flipkart as well as Mukesh Ambani’s newly proposed e-commerce venture.
This will help future retail as it will give the brick-and-mortar chain access to funds as well as expertise for strengthening its online presence.
The owner and the owner group holds 47.02 percent share in Future Retail, which operates hypermarket and supermarket chains under brands Big Bazaar, Easyday, Foodhall, HyperCity, FBB, Heritage Fresh, ezone, and WH Smith.
India’s largest retailer Future Group plans to open about 10,000 small stores as part of the strategy of growing revenues from smaller format stores more than ten times, to Rs 60,000 crore, from about Rs 5,000 crore at present, its founder Kishore Biyani said, without specifying a time-frame.