Jeff Bezos and Mukesh Ambani, two of the richest men in the world, are facing a turning point in India’s booming, nearly trillion-dollar retail market’s fight for preeminence.
For years to come, the result of a legal battle that has engulfed the empires of the billionaires Amazon.com and Reliance Industries Ltd – where a court verdict is imminent – will form the retail landscape of India.
The winner of the battle for Future Retail Ltd the estranged local affiliate of Amazon will assume pole position in the race to meet more than a billion people’s everyday needs.
The high-stakes battle, which has snowballed from what started as a conflict between Amazon and Future, is charged with insider trading and contractual violations, as well as nationalistic cries to hold the US giant at bay.
It can slow Reliance’s plans to expand its e-commerce and brick-and-mortar activities if Amazon succeeds. If Amazon loses, its hopes of expanding its interests in the second-largest retailer in India and cashing in on its main supply chain of groceries will be dashed, industry insiders claim.
Amazon is seeking to avoid the $3.4 billion acquisition of the retail properties of Future Group by Reliance. The US company, which obtained an injunction to block the Reliance-Future contract from an arbitrator, accuses its partner of violating some pre-existing agreements, misleading the public, and insider trading. The claims are refuted by the Future.
If Reliance moves faster and faster, it will obviously become very difficult for anyone else to win. Reliance, seeking to grow its JioMart e-commerce business, completed a fund-raising of $6.4 billion this month by selling a stake in its retail arm to investors such as Silver Lake Partners and KKR & Co.
In the next four years, India’s retail market will rise by 46 percent to an annual $1.3 trillion, Forrester Research forecasts. The primary fight is over groceries, which by 2024 are projected to be worth around $740 billion a year.
Established by Kishore Biyani, called the retail king of India, in recent decades, Future transformed the retailing of the country before COVID-19 hit the company so hard this year that Biyani was forced to find a new buyer. For both Reliance and Amazon, that makes the future a valuable asset.
With the next rival, Avenue Supermarts Ltd’s DMart, having just 220 outlets in about 70 cities, Reliance and Future dominate the market.