Amazon, Alibaba are shopping in India to up the ante in the groceries battleground; target brick-and-mortar retailers

India’s overall retail market is pegged at Rs 47 lakh crore and modern retail and e-commerce together make up just about four percent of that pie.

FP Staff August 30, 2018 21:05:56 IST
Amazon, Alibaba are shopping in India to up the ante in the groceries battleground; target brick-and-mortar retailers

Amazon is reportedly looking to acquire a stake in three brick-and-mortar retailers in India in a bid to boost its food and grocery retail business in the country.

The e-commerce giant has initiated talks to pick a minority stake in the RP-Sanjiv Goenka Group-owned Spencer’s Retail, reported The Economic Times (ET).

Amazon and private equity firm Samara Capital are negotiating to acquire a 42-49 percent stake in Aditya Birla Retail Ltd’s More supermarket chain, the Mint reported earlier.

And media reports have, over the last six months, hinted that Amazon has held discussions to buy a stake in Kishore Biyani’s Future Group.

Amazon Alibaba are shopping in India to up the ante in the groceries battleground target brickandmortar retailers

Representative image. Reuters

If the three deals work out, Amazon will be able to tap over 1,700 stores in India as it preps to compete with Walmart-owned Flipkart and Reliance Retail, the ET report said.

“Without the support of brick and-mortar chains that already have stores in all cities including the tier II and III markets, it will be difficult for Amazon to expand its play in food and grocery retail across the country,” an unnamed executive told ET.

India’s overall retail market is pegged at Rs 47 lakh crore. And modern retail and e-commerce together make up just about four percent of that pie, or some Rs 2 lakh crore, suggesting there’s plenty of room for organised retail to grow.

Alibaba is here too

Amazon’s reported buying spree will have to fend off similar attempts by Chinese rival Alibaba. The Jack Ma-led firm has reportedly revived negotiations with India’s leading conglomerates to boost retail plans in what is now the world’s sixth-largest economy.

Senior Alibaba executives have held talks with the Tata Group, with Mukesh Ambani-led Reliance Industries (RIL) and with Biyani’s Future Retail, The Times of India reported last week.

At present, More is the fourth-largest supermarket chain in the country and trails Reliance Retail, the Future Group and D-Mart.

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