E-commerce giant Amazon has taken yet another monumental decision in a bid to consolidate its position in the Indian market. The E-commerce behemoth is all set to acquire 49% stake in Kishore Biyani’s Future Coupons. The move assumes huge importance given that Future Coupons is a promoter entity of Future Retail, which operates India’s second-largest retail chain Big Bazaar.
The financial details of the agreement have not been yet revealed to the media. But it is confirmed that the deal will give the ‘call option’ to acquire all or part of the Promoters’ shareholding in Future Retail Ltd. The deal also paves way for amazon to acquire 3.58% stakes in Future Group – the parent company under which Future Retail Limited and Future Lifestyle Fashions Limited operates.
The high-profile deal is subjected to regulatory approvals but getting a nod from the government should not be a problem.
What does this deal means for Amazon?
This deal will give huge push to Amazon’s omnichannel strategy as it gears for a ruthless war with Walmart owned Flipkart. Amazon can easily leverage the Kishore Biyani led company’s presence in the brick and mortar retail space. As of today, Future Retail operates 293 Big Bazaar stores across the entire country.
A good omnichannel strategy will most certainly give Amazon a handy advantage in its e-commerce battle with all its rivals including Flipkart.
Whether the E-commerce giant will exercise the call option to acquire substantial stake in Future Retail is still uncertain. However, given the competitive advantage it may very well go ahead with stake acquisition.
It will be now interesting to see how Flipkart reacts to Amazon’s push for omnichannel growth. Now that Flipkart has Walmart on its side, it has the deep pockets to respond to Amazon’s bold moves. Meanwhile, following the decline of Paytm Mall India’s e-commerce battle has now been largely reduced to two horse race. But Snapdeal’s recent resurgence is likely to add another twist to India’s e-commerce story.