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Amazon Focuses on Expanding Retail Presence in India


Aug. 13 2019, Published 5:17 p.m. ET

According to an August 13 report by the Times of India, Amazon (AMZN) is in late-stage discussions related to the acquisition of up to 10% in Future Retail. Future Retail is a leading brick-and-mortar retailer in India, and the deal is expected to be officially announced in the coming weeks.

On August 1, the Economic Times reported Amazon’s ongoing exploratory talks to acquire up to 26% in India’s largest brick-and-mortar retailer, Reliance Retail.

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In September 2017, Amazon acquired a 5% equity stake in another major department store chain in India, Shoppers Stop. In September 2018, the company also acquired a 49% stake in Aditya Birla Group’s supermarket chain, More. To learn more about the company’s entry into India’s retail space, please read Why Amazon Is Buying into Indian Retailers.

India’s retail industry

According to the IBEF (Indian Brand Equity Foundation), the size of the Indian retail industry is expected to grow from $672 billion in 2017 to $1.2 trillion in 2020. Plus, Amazon’s inorganic growth strategy is bolstering its position in the rapidly expanding consumer retail market in India.

The acquisition of brick-and-mortar companies may also enable Amazon to offset the negative impact of the changed regulatory framework for e-commerce businesses in India. To learn more about these changes, please read What Next for Amazon in India amid New Retail Rules?

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Amazon’s advent in the food delivery business in India

On July 29, the Business Standard reported ongoing talks related to a possible acquisition of a food delivery business, Uber Eats by Amazon. The company plans to expand the scope of its services, especially for Amazon Prime members.

Statista projects aggregate revenues earned by Indian online food delivery players to reach $7.73 billion in 2019. Of these, restaurant-to-consumer delivery businesses account for $4.33 billion in revenues. Platform-to-delivery businesses account for the remaining $3.96 billion in revenues.

Statista projects food delivery revenues in India to rise to $12.54 billion in 2023. Notably, Amazon aims to benefit from this growing opportunity in the Indian market.

Amazon’s growth strategy in India

Amazon has almost doubled its paid Prime membership in India from January 2018 to June 2019. Plus, the company is investing in a global selling program to improve the penetration of Indian sellers across geographies. In June, the company launched its Amazon Flex app in India. To learn more about Amazon Flex, please refer to Amazon Launches Amazon Flex for 1-Hour Deliveries.

In addition to its food delivery and retail efforts, Amazon is also exploring opportunities in the Indian travel business. The company has partnered with Cleartrip to offer domestic flight bookings in India. For more information, please read Amazon Could Disrupt India’s Travel Industry


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