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Amazon.com's enormous online presence could help bolster Reliance's consumer and private labels business
Amazon.com's enormous online presence could help bolster Reliance's consumer and private labels business

Amazon in talks to buy stake in India's Reliance Retail

INTERNATIONAL NEWS

By Aditya Kalra - Aug 5th, 09:02

Amazon.com is in talks with Reliance Industries’ retail unit to buy a stake in India’s biggest brick-and-mortar retailer, two sources with knowledge of the talks said.
 

Amazon’s enormous online presence could help bolster Reliance’s consumer and private labels business. A partnership would help the duo counter Walmart, which invested $16bn in India’s Flipkart in 2018, in the battle for a bigger share of India’s fast-growing e-commerce market.

In late December, India modified rules around foreign direct investment in e-commerce, creating additional hurdles for companies such as Amazon and Flipkart, and giving companies such as Reliance an edge.

Amazon had made the proposal to Reliance — controlled by Mukesh Ambani, India’s richest man — for the partnership, but it was not clear whether a deal would materialise, one of the sources said.

The second source said Amazon had been pondering a proposal to purchase an up to 26% stake in the Reliance unit since at least February.

“For Amazon, it is about neutralising a major rival and allowing itself to grow,” said the second source, who added the company envisions helping Reliance’s about 40 brands and grocery products go online.

Further details of the possible deal, first reported by India’s Economic Times newspaper on Thursday, were not immediately clear.

Amazon, which declined to comment on Thursday, did not immediately respond to request for comment on Friday.

Reliance on Friday pointed to its Thursday statement, which read it would make any disclosures to stock exchanges as and when necessary.

Reliance could potentially leverage Amazon’s global experience in technology, supply chain, and logistics as it aims to connect grocery stores across the country digitally through its Jio telecoms network, the biggest in India by subscribers.

For Amazon, picking up a stake in a Reliance unit could mean getting access to the Jio telecoms platform and its vast retail footprint of more than 10,600 stores across India. It might also add more firepower to their lobbying efforts, as the Ambani family is viewed as being well-connected politically.

Seattle-based Amazon is keen to get a bigger share of India’s
e-commerce market, which Deloitte expects to more than treble to $84bn from 2017 to 2021.

Reliance was previously in talks with China’s Alibaba to sell a stake in Reliance Retail, but a deal could not be sealed due to differences in valuation, according to a person familiar with the matter.Business Live 

Read more about: retail | reliance | india | ecommerce | amazon

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