Amazon is exploring a deal to buy up to 26 percent stake in Reliance Retail. The details surface after a report showed that Amazon is also looking to enter in food delivery business in India. Reliance Retail is the largest brick-and-mortar retailer in the country. Reliance Industries Ltd’s retail unit was previously in talks with China’s Alibaba to sell a stake. However, the deal could not be sealed due to differences in valuation. Also Read - Amazon Freedom Sale to kick off from August 8; deals on Oppo K3, Redmi Y3, Honor 8X, Realme U1 and moreAlso Read - Reliance JioGigaFiber to launch early next month: Here is what to expect
According to Economic Times, Reliance Retail will strengthen its business by having an online partner. The report adds that talks between Amazon and Reliance may not lead to a deal. Reliance has confirmed that it will make any disclosures to stock exchanges as and when necessary. “As a policy, we do not comment on media speculation and rumors,” the Mukesh Ambani-led company said in a statement. “Our company evaluates various opportunities on an ongoing basis.” Also Read - Amazon plans to launch its own food delivery service to take on Swiggy and Zomato in India
Is Amazon interested in Reliance Retail?
A deal is seen as a win for both the companies looking for further growth in India. Reliance, which is promising to connect local shops digitally via Jio‘s network, could use Amazon’s technology. The company run by India’s richest man can also leverage Amazon’s experience with supply chain and logistics. Amazon’s massive presence in the online retail could help Reliance’s consumer and private labels. According to Reuters, Reliance Retail had a revenue of $5.53 billion (Rs 381.96 billion) during the quarter ending June.
Picking up a stake in Reliance Retail could also grant Amazon access to Jio’s telecom platform. The Seattle-based e-commerce giant has already picked up Whole Foods Market in the US. With Reliance, it stands to gain access to a retail footprint of more than 10,600 stores across India. The report also mentions that Amazon gains lobbying efforts via Reliance family’s close connection with Indian political parties. “There could be synergies which are beyond retail,” Arvind Singhal, chairman of retail consultancy Technopak Advisors, told Reuters.
Amazon is engaged in a fierce battle with Walmart-owned Flipkart in India’s online retail segment. It is yet to drive consumers way from Flipkart, which remains the largest in terms of market share. Amazon tries to woo consumers with additional benefits called Prime membership. However, the program alone has not helped the company to expand its base in the country. With planned food delivery and payment platform, Amazon is trying to be omnipresent in a country of over 1.2 billion people.