Amazon to acquire 10% stake in Future Retail

Under pressure from US retail giant Walmart’s acquisition of Indian online retailer Flipkart, Kishore Biyani’s Future Retail Ltd too has opted to join the e-commerce bandwagon through sale of 10 per cent stake to Amazon Inc.

Future Retail, which runs stores under the name Big Bazar,  is reported to be selling a 10 per cent stake to Amazon for about Rs2,000 crore ($281 million). The sale is likely to be routed through a holding company, the reports added. 
Under the agreement, Amazon will have the option to buy more shares from Kishore Biyani, Future Retail’s founder and chairman, giving the US e-commerce firm an edge over rival Flipkart and the planned e-commerce venture of Reliance Retail
While Walmart will get the e-commerce edge with the acquisition of Flipkart, online retailer Amazon will get the brick-and-mortar advantage with the acquisition of stake in Future retail.
The deal with the Mumbai-based company, which operates its flagship “Big Bazaar" grocery store chain, will give Amazon more exposure to the business after it bought Whole Foods Market Inc for $13.7 billion in 2017 and secured a foothold in the US food retailing segment. 
The proposed investment in Future Retail will enable Amazon to tap into India’s rising demand for household products and home-delivered fresh farm produce and vegetables.
Reports said, discussions are still under way, and the deal could still falter or be delayed.
The American online giant is making a last-ditch attempt to dominate the last sizable market bay a networks of hypermarkets and supermarkets, after losing ground in China.
The acquisition gives the Jeff Bezos-controlled firm an edge over rival Walmart Inc and the planned e-commerce venture of Mukesh Ambani, Asia’s richest man, that plans to combine the online and offline retail formats in India. 
Walmart, which spent $16 billion last year to acquire Indian e-tailer Flipkart Online Services Pvt. Ltd, has a local unit that is allowed to sell goods to smaller grocery stores but not directly to consumers.
Amazon has been acquiring tiny stakes in other Indian brick-and-mortar chains such as Shoppers Stop Ltd. and a grocery chain from the Aditya Birla Group in the past couple of years.
Future Retail operates over 2,000 stores across 400 Indian cities, including the “Big Bazaar" stores that are designed to appeal to the value-conscious urban consumers who have traditionally shopped in India’s chaotic street markets.
More recently, it has been building out its network of small-format corner stores that seek to provide the same convenience of the traditional grocery stores that dot every neighborhood in India. Future Retail is also expanding its affordable fashion wear chain under the “fbb" brand.